Moneys Our ob every h the mo

Transcription

Moneysupermarket.com Group PLC
Annual Report 2009
Moneysupermarket.com Group PLC Annual Report 2009
Moneysupermarket.com
Our objective is to help
every household to make
the most of their money.
We do this by providing our customers with a
free online service enabling them to compare
a wide range of products and to find the one
most suited to their needs. Our customers can
compare products by price, product features
and service.
We provide these services through our two
market leading brands, moneysupermarket.com
and travelsupermarket.com.
Helping every
household
to make the
most of their
money
Contents
Business Overview
1 At a Glance
3 Highlights
4 Our Strategy
26 Corporate Responsibility
Report
Business Review
8
9
10
14
22
Chairman’s Statement
The Market at a Glance
Chief Executive’s Report
Financial and Business Review
Principal Risks and
Uncertainties
28 Directors’ Report
33 Corporate Governance Report
38 Audit Committee Report
40 Nomination Committee Report
41 Directors’ Remuneration Report
49 Independent Auditor’s Report
Management
24 Board of Directors and
Company Secretary
Moneysupermarket.com Group PLC – Telephone: 01244 665700 – Web: www.moneysupermarket.com
Corporate Governance
Financial Statements
50 Consolidated Financial Statements
54 Notes to the Consolidated
73 Company Financial Statements
74 Notes to the Company
Registered in England No. 6160943. Registered Office: Moneysupermarket House, St David’s Park, Ewloe, Chester CH5 3UZ
Corporate Responsibility
General
78 Shareholder Information
80 Financial Calendar
Annual Report 2009
and service.
Helping every
household
to make the
most of their
money
Contents
Business Overview
1 At a Glance
3 Highlights
4 Our Strategy
Report
Business Review
8
9
10
14
22
Principal Risks and
Uncertainties
Management
Company Secretary
General
Moneysupermarket.com At a Glance
How do we operate?
Our comparison services offer a compelling proposition both to
our customers and to product providers.
Our customers are able to search and compare products by price,
product features and service in one place so that they can choose
the product most suited to their needs. This saves our customers
valuable time and helps our customers to make the most of their
money – always important but never more so than during uncertain
economic times.
To providers, we strive to offer the most cost effective solution to
customer acquisition in our chosen business areas. By matching the
right customer to the right provider we offer our providers an
efficient and completely measurable media tool. We have
considerable volumes of informed customers actively looking for the
product most suited to their needs and ready to purchase. This
enables product providers and advertisers to target their marketing
spend most effectively.
Our online services are free to our customers. Our revenue comes
predominantly from fees paid to us by product providers and
advertisers either when our customer clicks through to their website
or when our customer actually applies for or purchases a product.
How do we measure our
performance?
We use a number of key performance indicators (KPIs) to measure
our performance against our strategy. These are reviewed on a
regular basis. The principal KPIs for each of our verticals are:
REVENUE SPLIT BY VERTICAL - £M
4
3
2008
2008
2009
Travel products
compared include:
•Loans
•Credit cards
•Current accounts
•Savings accounts
•Motor
•Home
•Travel
•Breakdown
•Flights
•Hotels
•Package holidays
•Car hire
•Utilities
KPIs:
KPIs:
KPIs:
KPIs:
Visitors (000)
24,143 -3%
Visitors
Visitors
Visitors(000)
(000)
(000)
35,178
35,178
35,178 0%
0%
0%
2009
2009
2009
2009
35,178
2009
35,178
35,178
35,178
2009
2009
2009
24,143
24,143
24,143
24,1432009
2008
35,131
2008
2008
2008
2008
35,131
35,131
35,131
2008
2008
2008
24,830
2008
24,830
24,830
24,830
2008
0
68.3
1. Money 38.1
2. Insurance 77.7
2. Insurance 75.7
3. Travel
19.1
3. Travel
16.3
4. Home Services
7.4
4. Home Services
5.5
0
24830
35178
35178
35178
Transactions
(000) 00Transactions
Transactions
Transactions
(000)
(000)
(000)
13,189 -14%
13,189
13,189
13,189 -14%
-14%
-14%
11,650
11,650
11,650 2009
2008
2008
2008
15,003
15,003
15,003
15,003
2008
15003
15003
15003
15003
0
13,189
2009
2009
2009
2008
1.94
1.94
1.94
2008
2008
2008
1.94
0.00
0.00
0.00
1.94
0.00
1.94
1.94
1.94
13,189
13,189
13,189
2009
15,385
15,385
15,385
2008
15385
15385
15385
0
3.14
2009
2009
2009
18,216
2008
2008
2008
11,245
11,245
11,245
0
18216
48924
48924
48924
Transactions
Transactions
Transactions
(000)
(000)
(000)
5,177 +79%
5,177
5,177
5,177+79%
+79%
+79%
2009
2008
38,149
38,149
38,149
38149
11,245
18,216
18,216
18,216
0
28,904
28,904
28,904
2008
2008
2008
38,149
00 0
2009
0
38149
38149
38149
2009
2009
2009
5,177
2,891
5,177
5,177
5,177
2008
2008
2008
00 0
18216
18216
18216
2,891
2,891
2,891
5177
5177
5177
5177
Revenue per visitor (£)
Revenue
Revenue
Revenueper
per
pervisitor
visitor
visitor(£)
(£)
(£)
Revenue
Revenue
Revenueper
per
pervisitor
visitor
visitor(£)
(£)
(£)
0.30
0.30
0.30
0.30
0.38
0.38
0.38
0.38
2009 0.30
2009
2009
2009 0.30
0.30
0.30
3.13
3.13
3.13
0.38
0.38
0.38
0.38
2009
2009
2009
2009
2008
3.13
3.13
3.13
2008
2008
20083.13
28,904
2009
2009
2009
•Shopping
Visitors
Visitors
Visitors(000)
(000)
(000)
18,216
18,216
18,216+62%
+62%
+62%
2008
48,924
48,924
48,924
2008
2008
2008
48,924
•Vouchers
Visitors (000)
18,216 +62%
42,970
42,970
42,970
24830
24830
24830
0
48924
Transactions
Transactions
Transactions
(000)
(000)
(000)
28,904 -24%
28,904
28,904
28,904 -24%
-24%
-24%
15385
0.00
0.00
0.00
2009
2009
2009
42,970
0
2008
2008
2008
15,385
00 0
Visitors
Visitors
Visitors(000)
(000)
(000)
42,970
42,970
42,970-12%
-12%
-12%
•Mobiles
3.14
3.14
0.00 3.14
2008
0.39
0.39
0.39
2008
2008
2008
0.39
0.00
0.00
0.00
0.39
0.00
0.39
0.39
0.39
2008
2008
2008
0.66
0.00
0.00
0.00
0.66
0.66
0.66
0.66
Revenue
per transaction
Revenue
Revenue
Revenue
(£) per
per
pertransaction
transaction
transaction(£)
(£)
(£) Revenue per transaction
Revenue
Revenue
Revenue
(£) per
per
pertransaction
transaction
transaction(£)
(£)
(£)
Revenue
Revenue
Revenue
(£) per
per
pertransaction
transaction
transaction(£)
(£)
(£)Revenue per transaction
Revenue per transaction
Revenue
Revenue
Revenue
(£) per
per
pertransaction
transaction
transaction(£)
(£)
(£)
5.20
5.20
5.20
5.20
1.03
1.03
1.03
1.03
0.51
0.51
0.51
0.51
2.82
2.82
2.82
2.82
2009
2009
2009
5.20
5.20
5.20
5.20
2009 1.03
2009
2009
2009 1.03
1.03
1.03
2009
2009
2009
2009
0.51
0.51
0.51
0.51
2009
2.822009
2009
2009
2.82
2.82
2.82 2009
2008
0.00
0
Revenue
Revenue
Revenueper
per
pervisitor
visitor
visitor(£)
(£)
(£)
Revenue
Revenue
Revenueper
per
pervisitor
visitor
visitor(£)
(£)
(£) Revenue per visitor (£)
3.13
3.13
3.13
3.13
1.08
1.08
1.08
1.08
2009
2009
2009
2009
3.13
2009
1.08
2009
2009
2009
1.08
1.08
1.08
0.00
1. Money 11,650
2009
2009
2009
00 0
2008
2
Visitors (000)
42,970 -12%
Visitors
Visitors
Visitors(000)
(000)
(000)
24,143
24,143
24,143-3%
-3%
-3%
Visitors (000)
35,178 0%
2009
2009
Home services
products compared
include:
Insurance products
compared include:
1
1
HOME
SERVICES
TRAVEL
Money products
compared include:
0
35178
Transactions (000) 00Transactions
Transactions
Transactions
(000)
(000)
(000)
11,650 -22%
11,650
11,650
11,650 -22%
-22%
-22%
2
1
INSURANCE
0
4
3
MONEY
2008
3.82
3.82
3.82
2008
2008
2008
3.82
0.00
0.00
0.00
3.82
0.0
3.82
3.82
3.82
4.33
2008
2008
2008
0.0
0.00.0
2
4.33
4.33
4.33
5.2
2008
0.00
5.2
5.25.2
0.44
0.44
0.44 2008
2008
2008
0.44
2008
0.00
0.00
0.00
0.51
0.00
0.51
0.51
0.51
2008
2008
2008
2.52
0.00
0.00
0.00
0.66
0.66
0.66
2.52
2.52
2.52
2.52
2.52
2.52
2.52
How do we operate?
economic times.
performance?
4
3
2008
2008
2009
Travel products
compared include:
•Loans
•Credit cards
•Current accounts
•Savings accounts
•Motor
•Home
•Travel
•Breakdown
•Flights
•Hotels
•Package holidays
•Car hire
•Utilities
KPIs:
KPIs:
KPIs:
KPIs:
Visitors (000)
24,143 -3%
Visitors
Visitors
Visitors(000)
(000)
(000)
35,178
35,178
35,178 0%
0%
0%
2009
2009
2009
2009
35,178
2009
35,178
35,178
35,178
2009
2009
2009
24,143
24,143
24,143
24,1432009
2008
35,131
2008
2008
2008
2008
35,131
35,131
35,131
2008
2008
2008
24,830
2008
24,830
24,830
24,830
2008
0
68.3
1. Money 38.1
2. Insurance 77.7
2. Insurance 75.7
3. Travel
19.1
3. Travel
16.3
4. Home Services
7.4
4. Home Services
5.5
0
24830
35178
35178
35178
Transactions
Transactions
Transactions
(000)
(000)
(000)
13,189 -14%
13,189
13,189
13,189 -14%
-14%
-14%
11,650
11,650
11,650 2009
2008
2008
2008
15,003
15,003
15,003
15,003
2008
15003
15003
15003
15003
0
13,189
2009
2009
2009
2008
1.94
1.94
1.94
2008
2008
2008
1.94
0.00
0.00
0.00
1.94
0.00
1.94
1.94
1.94
13,189
13,189
13,189
2009
15,385
15,385
15,385
2008
15385
15385
15385
0
3.14
2009
2009
2009
18,216
2008
2008
2008
11,245
11,245
11,245
0
18216
48924
48924
48924
Transactions
Transactions
Transactions
(000)
(000)
(000)
5,177 +79%
5,177
5,177
5,177+79%
+79%
+79%
2009
2008
38,149
38,149
38,149
38149
11,245
18,216
18,216
18,216
0
28,904
28,904
28,904
2008
2008
2008
38,149
00 0
2009
0
38149
38149
38149
2009
2009
2009
5,177
2,891
5,177
5,177
5,177
2008
2008
2008
00 0
18216
18216
18216
2,891
2,891
2,891
5177
5177
5177
5177
Revenue
Revenue
Revenueper
per
pervisitor
visitor
visitor(£)
(£)
(£)
Revenue
Revenue
Revenueper
per
pervisitor
visitor
visitor(£)
(£)
(£)
0.30
0.30
0.30
0.30
0.38
0.38
0.38
0.38
2009 0.30
2009
2009
2009 0.30
0.30
0.30
3.13
3.13
3.13
0.38
0.38
0.38
0.38
2009
2009
2009
2009
2008
3.13
3.13
3.13
2008
2008
20083.13
28,904
2009
2009
2009
•Shopping
Visitors
Visitors
Visitors(000)
(000)
(000)
18,216
18,216
18,216+62%
+62%
+62%
2008
48,924
48,924
48,924
2008
2008
2008
48,924
•Vouchers
Visitors (000)
18,216 +62%
42,970
42,970
42,970
24830
24830
24830
0
48924
Transactions
Transactions
Transactions
(000)
(000)
(000)
28,904 -24%
28,904
28,904
28,904 -24%
-24%
-24%
15385
0.00
0.00
0.00
2009
2009
2009
42,970
0
2008
2008
2008
15,385
00 0
Visitors
Visitors
Visitors(000)
(000)
(000)
42,970
42,970
42,970-12%
-12%
-12%
•Mobiles
3.14
3.14
0.00 3.14
2008
0.39
0.39
0.39
2008
2008
2008
0.39
0.00
0.00
0.00
0.39
0.00
0.39
0.39
0.39
2008
2008
2008
0.66
0.00
0.00
0.00
0.66
0.66
0.66
0.66
Revenue
per transaction
Revenue
Revenue
Revenue
(£) per
per
pertransaction
transaction
transaction(£)
(£)
Revenue
Revenue
Revenue
(£) per
per
pertransaction
transaction
transaction(£)
(£)
(£)
Revenue
Revenue
Revenue
(£) per
per
pertransaction
transaction
transaction(£)
(£)
Revenue
Revenue
Revenue
(£) per
per
pertransaction
transaction
transaction(£)
(£)
(£)
5.20
5.20
5.20
5.20
1.03
1.03
1.03
1.03
0.51
0.51
0.51
0.51
2.82
2.82
2.82
2.82
2009
2009
2009
5.20
5.20
5.20
5.20
2009 1.03
2009
2009
2009 1.03
1.03
1.03
2009
2009
2009
2009
0.51
0.51
0.51
0.51
2009
2.822009
2009
2009
2.82
2.82
2.82 2009
2008
0.00
0
Revenue
Revenue
Revenueper
per
pervisitor
visitor
visitor(£)
(£)
(£)
Revenue
Revenue
Revenueper
per
pervisitor
visitor
visitor(£)
(£)
3.13
3.13
3.13
3.13
1.08
1.08
1.08
1.08
2009
2009
2009
2009
3.13
2009
1.08
2009
2009
2009
1.08
1.08
1.08
0.00
1. Money 11,650
2009
2009
2009
00 0
2008
2
Visitors (000)
42,970 -12%
Visitors
Visitors
Visitors(000)
(000)
(000)
24,143
24,143
24,143-3%
-3%
-3%
Visitors (000)
35,178 0%
2009
2009
Home services
products compared
include:
Insurance products
compared include:
1
1
HOME
SERVICES
TRAVEL
Money products
compared include:
0
35178
Transactions
Transactions
(000)
(000)
(000)
11,650 -22%
11,650
11,650
11,650 -22%
-22%
-22%
2
1
INSURANCE
0
4
3
MONEY
2008
3.82
3.82
3.82
2008
2008
2008
3.82
0.00
0.00
0.00
3.82
0.0
3.82
3.82
3.82
4.33
2008
2008
2008
0.0
0.00.0
2
4.33
4.33
4.33
5.2
2008
0.00
5.2
5.25.2
0.44
0.44
0.44 2008
2008
2008
0.44
2008
0.00
0.00
0.00
0.51
0.00
0.51
0.51
0.51
2008
2008
2008
2.52
0.00
0.00
0.00
0.66
0.66
0.66
2.52
2.52
2.52
2.52
2.52
2.52
2.52
Business Overview
Business Overview
Highlights
Our Financial Highlights
Business Review
•Revenue decreased by 23% from £178.8m to £136.9m
•Adjusted EBITDA1 of £36.0m
•Final dividend of 7.11p per share comprising:
•Dividend of 2.2p per share equivalent to 2008
final dividend
Management
•Special dividend of 4.91p per share
•Total dividend for the year of 13.34p per share
•Cash balances of £53.8m at 31 December 2009
•Profit after tax of £1.9m
1. Certain share option charges relating to Directors, senior management and other employees of the Group arising from when the
Group listed or when it was privately owned have been added back to calculate adjusted EBITDA. A charge for awards made under
the Group’s Long Term Incentive Plan is included within the adjusted results.
Our Operational Highlights
•Visitors1 to the Group’s websites increased to 120.5m
•Significant improvements in the website offering:
•New vouchers channel launched November 2009
•New credit card channel launched January 2010
•New motor insurance channel launched February 2010
•Online brand recognition increased to 85% in January
2010 from 80% in September 2008
General
1. The Group recorded a substantial increase in its reported visitors from 27 April 2008 to the end of June 2008 following a release
made in respect of the anti-virus software AVG. In assessing whether a webpage was safe it ‘followed’ every link or URL displayed
on an email or webpage to the destination website. This meant that many web based businesses including the Group recorded
visitors from users of the AVG software who themselves did not technically visit the website. The 2008 visitor count has been
adjusted for the estimated impact of this. AVG released a further update to its anti-virus software early in July 2008 which resolved
the issue.
3
Our Strategy
Best products
strong relationships with providers to
•Building
ensure our customers get great products tailored
to their needs
our customers with the widest range of
•Providing
products and the best deals
our customers do not get a better deal
•Ensuring
going direct
Best deal
We compare more than 100 motor
insurance providers to ensure our
customers get the best deals on
their motor insurance.
Providers
We work with the major motor
insurance providers to ensure our
customers get great products and
make great savings.
4
Business Overview
Business Review
Best shop
we deliver the best customer experience
•Ensuring
through our websites
we are open for business whenever and
•Ensuring
wherever our customers want to visit us
our core product comparison skills in
•Utilising
new markets and new product areas to meet our
customers’ needs
are important to them
Management
our customers have the tools they need
•Ensuring
to compare products based on the features that
Best customer experience
We have launched our new
credit card channel to make it
even easier for our customers
to find great deals.
General
Best tools
We ensure our customers
have the tools they need
to compare products
based on the features that
are important to them.
5
Our Strategy
Data
•Protecting data and keeping it safe
data to personalise our services and
•Using
products to more readily meet our customers’
needs
our customers to store their details to
•Enabling
improve their experience when they visit us again
Personalised service
Our vouchers channel displays
vouchers that will be of
interest to our customers
based on where they live.
Use of data
By joining our vouchers eclub and
storing their details with us, we can
keep our customers up to date with
the best local voucher deals.
6
Business Overview
Brand
on innovative and effective methods of
•Focusing
communication to build long term relationships
Business Review
with our customers
to retain our customers year after year
•Striving
through the provision of excellent customer
service
Management
in effective and targeted marketing,
•Investing
advertising and PR
our customers visit us first when they
•Ensuring
need help with their household bills
General
New television advertising
We launched our new advertising
campaign ‘a great deal easier’ fronted by
Omid Djalili in January 2010 to help ensure
our customers visit us first whenever they
need help with their household bills.
7
Business Review
We are a very cash generative business,
but will run with a conservative debt free
balance sheet to enable us to take
advantage of the opportunities as our
business and the economy recovers
Our third year as a public company
was one of great change. The
impact of the credit crunch on our
business, especially our Money
vertical, was significant. Across the
whole of the United Kingdom, there
was a collapse in mortgage and
secured lending as the banks
contracted their loan books.
Against this economic backdrop, the
Group’s revenue declined by 23%
from £178.8m to £136.9m for the
year ending 31 December 2009 and
adjusted EBITDA declined by 26% to
£36.0m for the year.
However, some positives for the
Group emerged from the crisis. It
accelerated our transition to a
professional management team; it
prompted a significant reduction in
the cost base; it precipitated a
review and rethink of everything
that we do; and it demonstrated the
resilience of our diversified business
model with yet another year of solid
cash flow.
Peter Plumb was appointed Chief
Executive Officer in February 2009.
Graham Donoghue and David
Osborne were appointed as
Directors at the same time. All are
experienced professional managers.
The new management team have
settled in well. The drop in profitability
was minimised, the business was
stabilised, improvements were made
and by the final quarter our year on
year profitability was ahead of the
previous year. We came through the
worst recession since the 1930’s solidly
profitable, leaner and better managed.
Each of our verticals were
8
significantly enhanced during the
year and our advertising programme
changed, initially with Peter Jones
and then the new programme which
commenced in January this year
with Omid Djalili. We retained our
leading market position in the
Money vertical, maintaining market
share, in spite of revenues,
particularly from mortgage and
secured lending, falling by 44%.
We lost some market share in the
first quarter in our Insurance
vertical, when some of our site
enhancements failed to generate
the improvements expected, but
held share in the rest of the year.
Our travel website suffered in line
with the rest of the market and
consequently was managed for
margin. Our Home Services vertical
performed satisfactorily given the
greater stability in gas and
electricity prices in 2009. We
believe there is good potential to
switch customers from these to our
other verticals.
Following a review of the Group’s
cash requirements in July 2009, the
Company paid an interim dividend
of 1.3p per ordinary share on 16
October 2009, consistent with the
interim dividend in 2008. In addition,
the Company paid a special
dividend on the same date of 4.93p
per ordinary share reflecting the
Board’s confidence in the ability of
the business to generate cash on an
ongoing basis.
During the year, the business
continued to generate cash, and we
ended the year with cash balances of
Gerald Corbett
Chairman
£53.8m. With the business stabilised,
and with the tax changes announced
in the April 2009 Budget, we have
decided to recommend another
special dividend of £25m or 4.91p
per ordinary share. This brings the
total dividend for the year to 13.34p
per ordinary share including the total
of the special dividends of 9.84p per
ordinary share. If approved by
shareholders at the forthcoming
Annual General Meeting, this will be
paid on 1 April 2010 to all
shareholders on the register as at
5 March 2010.
We are a very cash generative
business, but will run with a
conservative debt free balance
sheet to enable us to take advantage
of the opportunities as our business
and the economy recovers.
The new year has begun
satisfactorily and we are quietly
confident that the worst is behind
us. It has been a difficult time for the
Company. Our employees have
responded magnificently to the
challenges they have faced and, on
behalf of the Board, I would like to
thank them for their commitment
during the year.
The Annual General Meeting will be
held at 10.30am on Wednesday 31
March 2010 at De Vere Carden Park
Hotel, near Chester, Cheshire, CH3
9DQ and I look forward to seeing
you there.
Gerald Corbett
Chairman
Business Overview
Business Review
35,178
retained its leadership
position in an increasingly
competitive market
Market Share – Moneysupermarket.com
45.7%
Management
16.6%
10.2%
8.0%
35,178
5.3%
4.4%
4.0%
2.4%
2.0%
1.6%
45.7%
16.6%
10.2%
www.moneysupermarket.com
www.fool.co.uk
8.0%
www.gocompare.com
www.moneyextra.com
5.3%
www.confused.com
www.moneyexpert.com
4.4%
www.comparethemarket.com
www.beatthatquote.com
www.uswitch.com
www.tescocompare.com
4.0%
Source:
Experian Hitwise: December 2009 monthly market share in ‘City’ (Cust. Cat.), measured
2.4%
by visits, based on UK usage
2.0%
1.6%
www.moneysupermarket.com
www.gocompare.com
www.confused.com
www.comparethemarket.com
www.uswitch.com
www.fool.co.uk
www.moneyextra.com
www.moneyexpert.com
www.beatthatquote.com 19.6%
www.tescocompare.com 17.7%
11.0%
Travelsupermarket.com was
managed for margin in a
declining market
26.0%
25.4%
0.3%
Market
Share – Travelsupermarket.com
www.cheapﬂights.co.uk
www.skyscanner.net
www.kayak.co.uk
www.sidestep.com
26.0%
www.travelzoo.co.uk
www.travelsupermarket.com
25.4%
19.6%
17.7%
11.0%
0.3%
www.skyscanner.net
www.kayak.co.uk
www.sidestep.com
General
www.cheapﬂights.co.uk
www.travelzoo.co.uk
www.travelsupermarket.com
Source: Experian Hitwise: December 2009 monthly market share in ‘City’ (Cust. Cat.), measured
by visits, based on UK usage
9
Business Review
This is a great business, with hugely
dedicated and skilled employees who
have a passionate focus on helping our
customers make the most of their money
Q: What have been
your main priorities and
achievements in your first
year as Chief Executive
Officer?
A: I was appointed Chief Executive
Peter Plumb
Chief Executive Officer
Officer during what can only be
described as an unprecedented
global financial crisis and a UK
recession. This, of course, helped
to shape the main priorities for
my first year. Those priorities were
reshaping the business for lower
volumes, ensuring critical investment
remained prioritised to capitalise on
a returning market, as and when it
happens, and most of all, focusing
our organisation even further on
helping our customers make the
most of their money.
The first six months of the year were
spent stabilising and reshaping the
business. We reduced our team by
approximately 80 people, a burden
shared across the business and at all
levels, delivering an annualised
saving in excess of £2m.
Our marketing team was challenged
to deliver ‘more for less’. Our online
marketing spend including both
search engine marketing and
partners was significantly reduced.
This was delivered through the use
of sophisticated bid management
tools and additional investment in
our marketing team, to harness
further the benefits our brand,
expert content and breadth of
services give us in natural online
10
search. We also reduced our offline
marketing spend. Television
advertising spend achieved much
greater ‘cut through’ with our
‘Savings on household bills’
campaign fronted by Peter Jones.
This campaign played a strong role,
when combined with our extensive
PR coverage, in building our brand
trust with customers.
In the second half of the year we
increased our investment in our core
systems as we continued our focus
on product development and
innovation. This resulted in a
significantly improved motor
insurance channel being launched in
beta during the year which went
fully live in February 2010. In
January 2010 we also launched an
improved credit card channel and
have a programme of delivery in
place for other major channels in
2010. Together, this will significantly
improve our customer proposition
and customer experience in these
important channels.
My final and most important priority
has been to place our customers
even further into the heart of our
business. We now run regular focus
groups, testing out new ideas with
real customers. We have continued
to invest in better analytics tools this
year, giving our design teams
granular data on how customers use
and interact with our services.
A: First and foremost, as a major
In 2009, Group revenue declined by
23% to £136.9m and adjusted
EBITDA declined by 26% to £36.0m
from £48.4m in 2008. The Group
maintained its overall market share
although it surrendered some share
in Travel which was managed for
margin in a declining market.
shareholder in the Company and as
an Executive Director, Simon has
been very supportive of our new
strategy and vision. On a personal
level, Simon and I compliment
each other and work well together.
Simon’s industry expertise has
helped me settle into my role
quickly.
A: As a business working in the
financial services sector, we have
clearly and directly been affected by
the tightening of credit markets and
In the first quarter of the year we
closed the non-core intermediary
business primarily due to the
difficulties faced in the mortgage
market last year.
The Insurance vertical remains the
Group’s largest vertical, accounting
for 55% of Group revenue up from
44% in 2008. Home and travel
insurance performed particularly
well, however, the motor insurance
market remained very competitive in
The Travel vertical also suffered in
2009 with revenue declining by 15%
to £16.3m following market trends
and the business was actively
managed for margin.
Q: Clearly the global
financial crisis has
negatively affected
most businesses. What
has been the impact on
Moneysupermarket.com?
In a year of financial uncertainty for
our customers, visitors to our Money
vertical remained consistent. However,
with a shortage of credit products,
particularly in the first half of the year,
revenue decreased in the year by 44%
to £38.1m. The secured lending market
in particular suffered from a radical
reduction in the supply of credit and a
tightening of underwriting criteria.
Management
In his new role, Simon has focused
on product development and
innovation across the Group, areas
he is passionate about and in which
he clearly has a great deal of
knowledge and experience.
The Group was able to successfully
flex its cost base to protect its
operating margins. The Group has
remained strongly cash generative and
ended 2009 with no debt and a cash
balance of £53.8m after the payment
of the special dividend and the interim
dividend on 16 October 2009.
2009 with increased advertising
spend by some competitors. We
maintained a clear strategy of only
acquiring visitors at a level which
made financial sense. This resulted in
a decline in revenue for the year.
However in the second half of the
year following the launch of the
Peter Jones campaign and
improvements to the website, the
Insurance vertical grew over the
same period last year.
Business Review
downturn in the economy during 2009
which has made trading challenging.
Business Overview
Q: How have you worked
with Simon Nixon?
The UK’s
favourite
comparison
site!
General
11
Business Review
Chief Executive’s Report continued
Travelsupermarket.com was
redesigned during 2009, improving
the customer proposition and
customer usability of the site. During
the year, we launched a cruise
channel, increasing the breadth of
offering in the Travel vertical.
Revenue in the Home Services
vertical declined substantially in
2009 compared to 2008 chiefly due
to a year of more stable gas and
electricity prices compared to 2008.
During the fourth quarter, the Group
re-launched its vouchers channel
enabling customers to obtain
discounts on a much wider range of
different products and services.
As a business that concentrates on
helping every household to make
the most of their money, our
customer proposition is more
important now than ever.
Q: What are your plans for
2010 and beyond?
A: The actions we took in 2009 will
provide a strong platform for 2010
and I am confident that we will see
the results of that work during the
year and into 2011.
We have set out on pages 4 to 7 the
key elements of our strategy for
2010 as we continue to focus on
how we can help households make
We will continue our development
momentum across the business,
ensuring that in 2010 our
customers continue to receive
market leading services whilst
building a better service
infrastructure for our providers.
We will continue to work closely
with our providers to ensure that we
offer our customers the best
possible range of products and
deals. Our dedicated rates team
constantly scour the market for
changing rates and deals, striving to
offer customers the capability to
compare the whole of market and
best buy products.
Our redeveloped channels provide a
richer data set on our customers.
This will ensure we are better placed
to talk to our customers about
relevant services and deals. Our
customer communication
programme will become an ever
more important part of our business
as we build long term relationships
with our customers.
Most importantly, we will complete
the rollout of our new advertising
campaign ‘a great deal easier’
fronted by Omid Djalili. Our brand
adverts were aired in early January,
shortly followed by our new motor
insurance adverts in mid January.
The adverts have been well received
by our customers.
Q: This seems to be
different to your strategy
for 2009. What has
changed?
A: Although the recession meant
that my priority was to stabilise
the business in a market with
significantly lower credit availability
and travel product demand, we
continued investment in teams and
technology for the long term good
of our business. Investments were
made against the clear strategic
template I referred to above.
The major changes in strategy
have been ones of marketing
priorities and our approach to
international operations.
12
With our new offline marketing
campaign, we will be looking for
greater ‘cut through’ than we have
achieved with previous campaigns. It
is a very competitive market
and what you say is potentially
more important than how much
you spend.
On international, we have stronger
ambitions than ever to take our
model to new markets. However, our
green field market entry test in
Germany has taught us a great deal
this year. Germany, a country whose
personal finance market did not
escape the global crisis, has proven to
be very different to operate in. Our
innovative personalised loans website
went live during 2009 and is the most
sophisticated service in Germany.
However, we have learnt a great deal
about the need in Germany to
support online service offline. In the
UK, customers are happy to self serve
but in Germany a degree of offline
support is required through a
dedicated telephone support team.
The economics of such a service is
much less attractive and indeed
expensive as an organic entry
strategy. We are therefore winding
down this test whilst we explore other
options for international growth.
Q: What do you see as
Moneysupermarket.com’s
key strengths?
A: We are a business with many
important strengths. Principally, I see
them as team, scale and brand.
This year has seen a major
transformation within our business
in how we build and enhance our
website based on customer
behaviour. We start 2010 with a
much more agile business, both
curious and innovative. Although
2010 will see a continued website
development plan, our core motor,
home and credit card channels will
be able to respond to market
Business Overview
year for the Group. However, we
have maintained market share in key
verticals and I believe the business
has now stabilised with the worst
behind us.
I remain confident that the work we
are doing across the business and
the enhancements we have made
and will continue to make in 2010
will ensure the Group is well
positioned to capitalise on its
strengths when growth returns to
our markets.
I am very much looking forward to
2010 and beyond. This is a great
business, with hugely dedicated and
skilled employees who have a
passionate focus on helping our
customers make the most of their
money. That’s a good place to start
2010 from.
Q: What do you think will
be the challenges for the
year ahead?
A: Clearly 2009 has been a difficult
Our business is now 10 years old.
Moneysupermarket.com is a very
valuable brand which is highly
recognised and trusted by our
customers.
Q: When do you expect
things to improve?
Management
We are the UK’s number one price
comparison website and our scale
brings distinct benefits to our
business in two main ways. Firstly,
our breadth of services means that
customers have many reasons to
visit us throughout the year to make
the most of their money. This not
only gives us the financial benefits of
a diversified product range, but also
gives us a real opportunity to cross
sell products from our different
verticals. Secondly, we gain benefits
from our marketing efficiency, both
online and offline, an area that we
made good progress on in 2009.
sure that we offer them the best
range of products, ensuring that
whatever their financial needs, we as
a business can help them make the
most of their money in 2010.
Business Review
changes in almost real time,
something we certainly were
unable to do last year. Our new
executive team brings a strong mix
of skills to the business ranging from
blue chip marketing to hands on
provider experience.
A: 2010 will be another challenging
year for the business as we seek
to execute our strategy outlined
above and focus on delivering
our ambitious plans for 2010 and
beyond.
Peter Plumb
General
There will remain challenges in
the wider economy this year,
particularly in the credit markets,
and it will be critical that we remain
flexible and responsive to changing
market conditions and evolving
customer needs.
Our breadth of services will however
continue to be a source of great
strength. We will continue to focus
on our customers and on making
13
Business Review
The Group has presented below an extract of the Consolidated Statement of Comprehensive Income for the years
ended 31 December 2009 and 31 December 2008 along with a reconciliation to adjusted EBITDA. Revenue in 2009
was £136.9m (2008: £178.8m) which generated a net profit after tax of £1.9m (2008: loss of £59.1m). The Directors
believe that the presentation of an adjusted EBITDA measure will allow users of the financial information to gain a
better understanding of the underlying performance of the business.
Extract of Consolidated Statement of
Comprehensive Income
for the year ended 31 December 2009
2009 £000 2008
£000
Revenue
Cost of sales
136,874 178,800
(42,627) (62,063)
Gross profit
Distribution expenses
94,247
(18,446)
116,737
(21,618)
(69,140)
(75,310)
Administrative expenses – excluding Directors’ and senior managers’
share based compensation
Administrative expenses – Directors’ and senior managers’
share based compensation and related costs
Administrative expenses – impairment of goodwill
(4,355)
(4,325)
– (70,000)
Administrative expenses
(73,495) (149,635)
Profit/(loss) from operating activities
2,306
(54,516)
Reconciliation to adjusted EBITDA:
Profit/(loss) from operating activities
Share based compensation
Amortisation of intangible assets
Impairment of goodwill
Depreciation
2,306
4,067
25,200
–
4,436
(54,516)
4,163
25,200
70,000
3,543
Adjusted EBITDA
36,009
48,390
Adjusted earnings per ordinary share:
– basic (p)
– diluted (p)
4.6
4.5
6.9
6.8
14
Business Overview
Adjusted administrative costs decreased by £6.0m
(12%) over the prior year from £50.2m in 2008 to
£44.2m in 2009. Adjusted staff costs (including
contract resource) decreased by £3.5m to £26.9m.
15
General
The management team was considerably strengthened
during the year with a number of key appointments
which have provided the Group with a solid skills and
talent base to provide a foundation for future growth.
The new team has focused its efforts on technology and
marketing, to enhance our products and services and
improve the user experience, whilst maintaining and
strengthening our brand. In the second half of the year,
the Group invested £1.3m in technology using flexible
third party resource to improve its core architecture and
usability in a number of key channels. The Group
The adjusted administrative and distribution cost base
decreased by 13% from £71.8m to £62.6m in the year.
Distribution expenses decreased by £3.2m over the
prior year driven by reduced television advertising costs.
The Group maintained a level of presence on broadcast
media broadly similar to the prior year through a
deflation in media costs and changes made in the length
of slots acquired.
During the year the Group focused on reconfiguring its
business for the lower levels of supply for certain
products in the Money vertical and making its online
and offline marketing investment work harder, whilst
maintaining its market leading position. Good progress
has been made in both these areas, having reduced the
cost base substantially, expanded gross margin and
adjusted EBITDA margin against the second half of 2008.
Overview
We are pleased to present a solid set of financial results
for the year ended 31 December 2009. Revenue for the
year was £136.9m (2008: £178.8m) generating adjusted
EBITDA of £36.0m (2008: £48.4m).
Group gross margins at 68.9% improved by more than
three percentage points over last year. The Group
improved its proportion of direct to site revenue in the
year. An accrual release of £0.8m within cost of sales
was also made in the first half of the year following the
resolution of a dispute with a portal partner during the
period. The Group closed its lower margin intermediary
operation to new business early in the first quarter of
2009. Revenue recorded in 2009 represents trail
commission for mortgage applications in process prior
to closure and revenue from revenue sharing
agreements with third parties who have managed the
winding down of the business.
Reference is made in the Overview section below to
adjusted distribution and administration expenses, and
adjusted staff costs. These measures represent the
costs charged to the Statement of Comprehensive
Income, less the intangible amortisation, goodwill
impairment, and pre-listing share option charges.
Financial performance
Revenue declined by 23% to £136.9m (2008: £178.8m)
and adjusted EBITDA fell by 26% to £36.0m
(2008: £48.4m). Revenue and profitability in 2009
were impacted by the credit crunch which reduced
both the supply of credit and consumer discretionary
spend in the wider UK economy relative to the same
period last year. Revenue in 2008 included £13.2m
generated from secured lender First Plus which closed
to new business in August 2008. The Group maintained
its market share measured by Experian Hitwise against
its key competitor set.
Management
• The acquisition of Moneysupermarket.com Financial
Group Limited by the Company gave rise to £207.2m
of intangible assets. These are to be written off over
a period of 3-10 years with a charge of £25.2m per
annum to be recorded in each of the first three years
post acquisition. Charges relating to the impairment
of goodwill in 2008 have also been added back in
calculating adjusted EBITDA.
• Certain share option charges relating to Directors,
senior management and other employees of the
Group arising from the time the Group listed or when
it was privately owned have been added back to
calculate adjusted EBITDA. A charge for awards
made under the Group’s Long Term Incentive Plan is
included within the adjusted results for 2008
and 2009.
launched a new vouchers channel in November 2009
and released new credit card and motor insurance
channels in January and February 2010 respectively.
Other major refreshes of some of the Group’s key
channels will be released throughout the remainder of
the year. New advertising creative featuring Peter Jones
was released in June emphasising our key message that
we help households looking to save time and money on
their household bills. The campaign was used
successfully in the second half of the year whilst we
developed entirely new creative for 2010 which built
upon this theme and which aired for the first time in
January 2010 featuring comedian Omid Djalili. Feedback
from customers to date has been positive.
Business Review
Basis of preparation
The results show the trading results for the years
ended 31 December 2009 and 31 December 2008.
The following adjustments have been made to arrive
at adjusted EBITDA:
Business Review
Financial and Business Review continued
Headcount decreased from 555 to 442 from December 2008 to December 2009 as the Group sought to align its
cost base to the prevailing market conditions in the Money vertical.
In April 2009 the Group made headcount reductions of approximately 80 people across all areas of the business
although the largest impacted area was the Group’s mortgage brokerage business. The Group incurred costs of
£0.5m in relation to these and other reorganisation activities in the first half of 2009 yielding savings of
approximately £2.3m per annum in permanent staff costs.
The Group invested approximately £1.3m in the second half of 2009 in flexible resource to improve its core
technology and product in 2009 and into 2010. The Group made a number of significant releases to its product set
in the fourth quarter of 2009 and the first quarter of 2010 as referred to above. The Group expects a slightly higher
run rate level of investment over the course of 2010 to be made in technology.
Other costs including irrecoverable VAT decreased by £3.3m over last year as expenditure on, inter alia, television
advertising and search engine marketing was reduced, together with the reduction in the VAT rate to 15% which
was effective from 1 December 2008. The Group incurred a loss of £2.1m in Germany in 2009 (2008: loss of £1.2m).
Following a review of its German business, the Group has now taken the decision to wind down this test operation.
Adjusted EBITDA margins declined from 27.1% to 26.3% against the same period last year but improved significantly
from 22.9% in the second half of 2008.
The Group operates its internet business across four vertical markets. These are discussed below:
Revenue
31 December 2009
£000
%
31 December 2008
£000
%
Money
Insurance
Travel
Home Services
Other – UK
38,132
75,669
16,305
5,539
–
28
55
12
4
0
68,265
77,739
19,089
7,416
23
38
44
11
4
0
Total internet UK
Germany
135,645
361
99
0
172,532
–
97
0
Total internet
Intermediary
136,006
868
99
1
172,532
6,268
97
3
Total
136,874
100
178,800
100
Internet business
The Directors use key performance indicators (‘KPIs’) to assess the performance of the internet business against the
Group’s strategy. These are reviewed on a regular basis. The principal KPIs for the internet business are as follows:
Visitors
The Group measures the number of visitors to its websites as the number of unique visitors per day per channel,
measured on a cumulative basis using cookie-based tracking methodologies.
Transactions
The Group measures transactions at the point in time that the customer leaves the Group’s websites having clicked
through to a third party website, or in some cases having completed an application form hosted on the Group’s
websites.
Revenue per visitor (‘RPV’)
The Group measures the total revenue (including click and other internet revenue) divided by the number of visitors
defined above.
Revenue per transaction (‘RPT’)
The Group measures the click based revenue divided by the total number of transactions defined above.
The relative performance of each of the internet verticals is discussed below:
16
Business Overview
Money
The KPIs for the Money vertical are shown below:
31 December31 December
2009
2008
Visitors (000)1
Transactions (000)
Revenue (£000)
– click based revenue
Revenue (£000) – other Revenue (£000) – total
RPV
RPT
Change
35,178
11,650
35,131
15,003
0%
-22%
32,812
5,320
38,132
£1.08
£2.82
57,372
10,893
68,265
£1.94
£3.82
-43%
-51%
-44%
Other revenue, which includes revenue from the sale of
leads through PAA, commission based sales through
MCAT for mortgages and loans, and advertising
revenue, declined approximately £5.6m or 51% over the
year. Commissions that are earned from loan and
mortgage brokerage in particular have reduced
significantly relative to last year as a result of the difficult
market conditions and accordingly the Group materially
reduced headcount in this area in the first half of 2009.
Visitors (000)
35,178 0%
2009
35,178
2008
35,131
0
35178
Transactions (000)
11,650 -22%
2009
11,650
2008
35,178
35178
Transactions (000)
11,650 -22%
2008
0
2008
35,131
2008
0
15003
(000)
Revenue Visitors
per visitor
(£)
24,143 -3%
1.08
2009 2009
1.08
11,650
15,003
15003
General
2009
2009
15,003
0
Visitors (000)
35,178 0%
24,143
1.94 24,830
2008
0.00
1.94
Revenue0Transactions
per transaction
(£)
(000)
2.82
13,189 -14%
2009
2009
2008
2008
0.00
The Group noted that towards the end of the first half of
2009 external measures of credit availability began to
show signs of having stabilised. Trading in credit
products defined as total revenue from secured and
unsecured loans, credit cards, debt solutions and
mortgages excluding impression based advertising
revenue was slightly in excess of 50% down against last
year. However revenue from credit products improved in
the second half of the year to £13.9m from £13.3m in the
first half of the year despite the fact the second half of
the year is traditionally weaker than the first half given
the softness of fourth quarter revenue. Throughout the
year trading in the Money vertical improved on a
quarterly basis relative to the same quarter last year and
in the fourth quarter was approximately 10% down over
the same period last year.
Conditions in the credit market in 2009 were
significantly worse than those in the majority of 2008.
Credit markets materially worsened over the course of
2008 and particularly the second half of the year as the
credit crunch deepened impacting a number of key
channels in the Money vertical. The secured lending
market in particular suffered from a reduction in the
supply of credit and a tightening of underwriting criteria.
This was one of the Group’s largest revenue generating
channels. First Plus, a subsidiary of Barclays, which was
the Group’s largest single provider by revenue closed to
new business in August 2008. First Plus generated
revenue of £13.2m in 2008 which the Group was unable
to replace in 2009.
Total revenue in the Money vertical decreased by 44%
from £68.3m to £38.1m and click based revenue by 43%
from £57.4m to £32.8m. Visitors were broadly flat.
Management
Revenue from other banking products, particularly
savings and current accounts, has held up relatively well
although savings revenue softened into the fourth quarter
against a tough 2008 comparator. Savings revenue
increased significantly in the fourth quarter of 2008
following the financial uncertainty created after the
collapse of a number of financial institutions. The change
in sales mix away from credit based products, which
generate higher transaction revenue, towards general
banking products markedly reduced RPT and RPV in
2009 against last year. RPV has however been slowly
improving for the Money vertical throughout 2009 as the
wider markets have shown signs of stabilising.
Business Review
The Money vertical offers customers the ability to search
for, and compare, products for, amongst other things,
credit cards, current accounts, mortgages, loans, debt
solutions, savings accounts and business finance. It also
includes elements of the Group’s lead business (PAA)
and advisory business (MCAT) together with advertising
revenue that derives from financial products.
0
2.82
24830
13,189
3.82
15,385
3.82
Revenue
per2009
visitor (£)
Revenue
per visitor (£)
Group PLC Annual
Report
17
3.13
1.08
2009
2009
1.08
15385
3.13
Business Review
Insurance
The Insurance vertical offers customers the ability to
search for, and compare, insurance products for,
amongst other things, breakdown, dental, home, life,
medical, mortgage payment protection, motor, payment
protection, pet and travel insurance. It also includes
elements of the Group’s lead business (PAA) and
advisory business (MCAT) together with advertising
revenue that derives from insurance products.
Other revenue declined by approximately £4.0m. Other
revenue fell in the year driven by lower advertising
revenue from a deliberate reduction in the advertising
real estate made available to advertisers coupled with
the cessation of revenue generated from telephone
based leads which generated £2.5m in 2008. Both
measures were taken to improve the long term
customer experience of using the website in line with
our brand building strategy.
The KPIs for the Insurance vertical are shown below:
2009
2008
Visitors (000) Transactions (000)
Revenue (£000)
Revenue (£000) – other
Revenue (£000) – total RPV
RPT
1
Change
24,143
13,189
24,830
15,385
-3%
-14%
68,599
7,070
75,669
£3.13
£5.20
66,614
11,125
77,739
£3.13
£4.33
3%
-36%
-3%
Revenue in the Insurance vertical declined by 3% from
£77.7m to £75.7m. Transaction revenue increased by 3%
from £66.6m to £68.6m.
Revenue in the second half of the year increased by 2%
over the same period last year having been 6% lower in
the first half of 2009 relative to 2008. The improvement
in trading in the second half was driven by increased
visitor volumes helped in part by the television
advertising campaign featuring Peter Jones launched in
June 2009.
The motor insurance comparison market remains the
most competitive market in which the Group currently
Visitors (000)
operates. Revenue was approximately 5% lower in the
35,178 0%
motor insurance channel for the year as a whole
2009
35,178
although revenue in the second half grew marginally
35,131
2008
over the same period last year reflecting the increased
visitor volumes referred to above. The Group
0
35178
Transactions (000)
concentrated on the profitable online and offline
11,650 -22%
acquisition and retention of customers during the year
2009
11,650
rather than focusing exclusively on market share.
2008
15,003
Revenues in the other insurance channels, including
home insurance, travel insurance and life insurance, 0
15003
(000)
Visitors (000)
Revenue Visitors
per visitor
(£)
were all ahead of last year.
35,178
1.08
2009
24,143 -3%
1.08
2009
35,131
2008
2008
35,178 0%
2009
2008
0
35178
Transactions (000)
11,650 -22%
2009
2008
18
15,003
0
15003
1.08
2008
2008
0.00
Revenue
visitor
(£) Report 2009
Groupper
PLC
Annual
1.08
2009
2009
0
2.82
2008
2009
0
15,385
15385
(000)
Revenue perVisitors
visitor (£)
42,970 -12%
3.13
2009
3.1342,970
2009
2008
24830
15385
3.13
2008
0.00
3.13
48,924
3.14
Revenue per0Transactions
transaction (£)
(000)
5.20
28,904 -24%
15,385
3.82
24830
13,189
2008
13,189
3.13
2009
24,830
Transactions (000)
13,189 -14%
1.94
3.82
24,143
0
24,143
Revenue0Transactions
per transaction
(£)
(000)
2.82
13,189 -14%
2009
2009
1.94 24,830
0.00
11,650
Visitors (000)
24,143 -3%
0.0
2009
2009
2008
2008 4.33
0
48924
5.20
28,904
38,149
5.2
38149
0.38
2009
0.38
Home Services
The Home Services vertical offers customers the ability
to search for, and compare, products for broadband,
mobile telephones, vouchers, shopping and utilities.
The KPIs for the Travel vertical are shown below:
The KPIs for the Home Services vertical are shown
below:
Change
42,970
28,904
48,924
38,149
-12%
-24%
16,818
2,271
19,089
£0.39
£0.44
-12%
-32%
-15%
14,768
1,537
16,305
£0.38
£0.51
Change
18,216
5,177
11,245
2,891
62%
79%
5,322
217
5,539
£0.30
£1.03
7,297
119
7,416
£0.66
£2.52
-27%
82%
-25%
Revenue in the Home Services vertical decreased by
25% from £7.4m to £5.5m in the year. Revenue from
utilities, which represents the largest channel in which
the Group operates in the Home Services vertical,
declined by approximately one third against a strong
comparator period, with the first half of 2008 benefiting
significantly from the rising price of gas and electricity.
Utilities prices have been more stable in 2009 and there
has therefore been less demand for switching services,
although trading improved markedly in the second half
of 2009 relative to the first half of the year.
Transactions (000)
13,189 -14%
1,6502009
Transactions (000)
13,189 -14%
13,1892009
15,003
2008
15,385
2008
15003
0
Transactions (000)
Transactions (000)
Transactions (000)
5,177 +79%
28,904 -24%
28,904 -24%
13,189 2009
28,904 2009
28,904 2009
0
15,385
2008
15385
15385
0
2008
38,149
38,149
2008
0
0
38149
Transactions (000)
5,177 +79%
2009
5,177
2,891
5,177
2008
0
38149
2,891
5177
5177
2008
3.13
2008
24,830
0.00
0.00
48,924
2008
2008
3.13
3.14
2008
48,924
11,245
2008
0.39
2008
11,245
0.39
2008
2008
0.66
0.00
3.14
0.00
0.66
0.66
0.66
1.94 0
0
18216
18216
0.00
0.00
24830
48924
48924
per Transactions
transaction
Revenue
(£)
(£)
Revenue
Revenue
(£)
per transaction (£)
(000)0.39 per0Transactions
(000)0.39 per transaction
Revenue
transaction
Revenue
(£)
transaction (£)
action
(£)
onsRevenue
(000)
(000) per0transaction
Transactions
(000) perTransactions
5.20
5.20
1.03
5,177 +79%
5,177 +79%1.03
0.51
0.51
-14%
28,904 -24%
28,904 -24%
2.82 2009 13,189 2009
2008
3.82
0.0
2009
5.20
28,904 2009
15,385
2008 4.332008
3.82
per visitor (£)
0
15385
0.0
5.20
2009
28,904
38,149
2008 4.33 2008
5.2
0
38149
0.00
5.2
2009
2009
0.51
5,177
2009
2008
38,149
2,891
0.44
2008
2008
0
38149
0.00
0.51
0
2009
0.51 1.03 5,177
2009 1.03
2008
2,891
0.44
5177
0.00
0.51
General
(000)
(000)Revenue per visitor (£) Revenue per visitor (£)
visitor (£)
Revenue perVisitors
visitor (£)
(000)
(000)Revenue perVisitors
000)
visitor (£)
Revenue per Visitors
visitor (£)
r (£)Revenue perVisitors
0.30
0.30
18,216 +62%
18,216 +62%
0.38
0.38
42,970 -12%
42,970 -12%
-3%3.13
3.13
2009 0.30
2009 0.30
2009 24,143
2009
3.1342,9702009
3.13 42,9702009
18,216
2009
18,216
0.38
0.38
2009
2009
2009
2008
1.94
2008
2.52
5177
0.00
2.52
2.52
During the fourth quarter of 2008 the Group launched
its own shopping comparison service. A new vouchers
channel was launched in November 2009 enabling
Non click revenue representing impression based
customers to obtain discounts across a wide range of
advertising fell by 32% due to a reduced number of
products and services. This has enabled the Group to
visitors compared to the same period last year together
grow visitors to this vertical by 62% over last year.
Visitors (000)
Visitors (000)
Visitors (000)
Visitors (000)
Visitors (000)
Visitors (000)
with
weaker
demand
from
providers
for
advertising
Transaction
values
are typically
very+62%
low relative to the
18,216
+62%
18,216
42,970 -12%
42,970 -12%
24,143 -3%
24,143 -3%
real estate.
other channels in the vertical and the increase in visitors
18,216
2009
18,216
2009
42,9702009
42,970 2009
2009
2009
35,178
24,143
24,143
and transaction volumes has reduced the RPV for the
2008 vertical
11,245
2008against11,245
2008
48,924
2008
48,924
2008
2008
35,131
24,830
24,830
Home Services
measured
the same
period last0 year.
0
18216
18216
0
0
24830
24830
35178
0
0
48924
48924
Revenue in the Travel vertical was impacted as
customers reduced discretionary expenditure in
response to the increasing economic uncertainty.
Package holiday revenue did, however, grow fractionally
over the same period last year. The Group’s travel
website, travelsupermarket.com, was redesigned during
the second quarter of 2009 which improved the
usability of the website. A cruises channel was added in
June 2009.
Visitors (000) Transactions (000)
Revenue (£000)
Revenue (£000) – total
RPV
RPT
1
Revenue in the Travel vertical fell by 15% from £19.1m to
£16.3m. Transaction revenue declined by 12% from
£16.8m to £14.8m. Visitor levels declined by 12%
compared to the same period last year whilst RPV
remained broadly flat.
2009
2008
Management
Visitors (000)1
Transactions (000)
Revenue (£000)
Revenue (£000) – total
RPV
RPT
Business Review
The Travel vertical offers customers the ability to search
for, and compare, amongst other things, airport parking,
car hire, flights, hotels and package holidays.
2009
2008
)
Business Overview
Travel
per visitor (£)
Revenue per visitor (£) Revenue per visitor (£) Revenue per visitor (£) Revenue
0.30
0.30
0.38
0.38
2009
0.30
2009 0.30
3.13
0.38
0.38
2009
2009
2.52
19
Business Review
Germany
Following a review of its business in Germany, the
Group has decided to wind down its test operation. The
volume of business has been lower than originally
anticipated by the Group. Customers require more offline
support than those in the UK which would require the
Group to have significant call centre support. The Group
generated losses of £2.1m in Germany in 2009 (2008:
losses of £1.2m). The cost of winding down the operation in
Germany is expected to be approximately £0.8m in 2010.
Cash balance and dividend
As at 31 December 2009 the Group had a cash balance
of £53.8m. The Group continued to strengthen its cash
position throughout the year after payment of
dividends. Having reviewed the cash required by the
business, the Board is recommending a final dividend,
subject to shareholder approval, in respect of the year
ended 31 December 2009 of 7.11p per ordinary share,
comprising a dividend of 2.2p per ordinary share
equivalent to the final dividend paid in respect of the
2008 financial year and a special dividend of
approximately £25.0m equivalent to 4.91p per ordinary
share, reflecting the Board’s confidence in the ability of
the business to generate cash on an ongoing basis.
Together with the interim dividend of 1.3p per ordinary
share and special dividend of 4.93p per ordinary share
paid on 16 October 2009, this gives a total dividend for
the year of 13.34p per ordinary share. Subject to
shareholder approval, the total cost of the dividends for
the financial year will be £67.8m.
The ex-dividend date for the final dividend is 3 March
2010, with a record date of 5 March 2010 and a payment
date of 1 April 2010. Shareholders have the opportunity
to elect to reinvest their cash dividend and purchase
existing shares in the Company through a Dividend
Reinvestment Plan.
Tax
The Group tax charge of £1.3m in the Consolidated
Statement of Comprehensive Income represents an
effective tax rate of 40% (2008: -16%). This is higher
than the prevailing rate of 28%. The current year has
been impacted by losses from its German operation of
£2.1m for which a deferred tax asset cannot be
recognised. During 2008, the Group had disallowable
expenses in the year of £76.0m (including £70.0m of
goodwill impairment) and a further £1.2m of losses from
its German operation for which a deferred tax asset was
not recognised. In addition in 2008 the Group also
recognised a deferred tax charge of £2.7m representing
a revaluation of a deferred tax asset held in relation to
share options. In future, the Group expects the
20
underlying effective rate of tax to be close to the
standard UK corporation tax rate of 28%.
Earnings per ordinary share
Basic statutory earnings per ordinary share for the
year to 31 December 2009 was 0.4p (2008: loss per
share of 11.8p). Adjusted basic earnings per ordinary
share decreased from 6.9p to 4.6p per share. The
adjusted earnings per ordinary share is based on profit
before tax after adding back intangible amortisation and
share-based payment charges arising from pre-listing
share options. A tax rate of 28% (2008: 28.5%) has been
applied to calculate adjusted profit after tax.
Key contractual arrangements
Moneysupermarket.com Limited, a subsidiary of the
Company, is party to contracts and other arrangements
which the Directors judge are essential to the Group’s
business.
As with any internet business the Group is dependent
upon its ability to attract customers to its website either
directly or through paid search or portal partners, and
revenue generated from commercial arrangements with
its providers.
The Group uses television advertising to attract
customers to its website directly. The Group incurred
costs of £15.6m (2008: £19.0m) relating to television
advertising in 2009. The Group has contracts with a
number of media agencies to acquire advertising
inventory from commercial television companies. The
Group typically has a commitment of between 6 and 10
weeks expenditure at any one time. Television costs
represent 85% (2008: 88%) of distribution costs.
The Group uses search engines to acquire traffic via
paid search. The Group spent £30.8m (2008: £38.3m)
on paid search in 2009. Although there are a number of
search engines that operate in the UK, Google is the
dominant search engine and accounts for the majority
of the Group’s spend in this area. The Group has had
contracts with a number of media agencies in the year
to manage search engine marketing. The Group has no
forward commitment to search engines and manages its
spend on a real time basis.
The Group does not consider any of the contracts it has
with portal partners to be material.
The Group has a number of contracts with providers
which are based either on a cost per click basis or a cost
per action basis or a hybrid of the two. It also has a
number of commercial arrangements based on the
number of page impressions served in the case of
Business Overview
Business Review
banner advertising. The Group does not consider it has
any material contracts with providers in any one channel.
The Group does however frequently deal with providers
across a range of different channels managed under
different contracts, often to different parts of the same
organisation, and occasionally through third party
media agencies. At this consolidated channel level, the
largest individual provider represented approximately
4% (2008: 4%) of Group internet revenue.
Management
During 2009 there was consolidation in the financial
marketplace and the number of independent
organisations reduced. The brands under these group
umbrellas are usually run independently and the
marketing budget managed separately. The largest
group represented approximately 4% (2008: 9%) of
Group internet revenue.
Notes:
1. The Group recorded a substantial increase in its reported visitors
from 27 April 2008 to the end of June 2008 following a release
made in respect of the anti-virus software AVG. In assessing whether
a webpage was safe it ‘followed’ every link or URL displayed on an
email or webpage to the destination website. This meant that many
web based businesses including the Group recorded visitors from
users of the AVG software who themselves did not technically visit
the website. The 2008 visitor count has been adjusted for the
estimated impact of this. AVG released a further update to its
anti-virus software early in July 2008 which resolved the issue.
General
21
Business Review
Principal Risks and Uncertainties
The tables below summarise the material financial and operational risks to the Group
and how the Group seeks to mitigate them in the day-to-day running of the business.
Financial risks
Risk area
Significant
worsening in credit
markets
Significant
consolidation of
providers
Reduction of
providers
Security of cash
balances
Revenue assurance
Investment in new
areas
Financial services
and other markets
regulation and
taxation
Potential impact
Financial institutions may reduce the
quantum of lending and tighten their
acceptance criteria for customers seeking
to obtain credit. This may reduce Group
revenue. Providers may increase their
focus on customer retention rather than
acquisition. This may reduce commissions
available to price comparison websites.
Consolidation of providers may continue
in response to the poor credit markets.
This may reduce competition for business
with customers having less choice and
may reduce commissions available to price
comparison websites.
Mitigation
The Group continues to focus on building strong
relationships with providers to ensure the Group is
able to provide solutions to the needs of providers
and to maximise the opportunities for providers to
acquire customers in a cost effective manner.
The Group will continue to improve its search
functionality and deliver new relevant customers to
providers at demonstrably lower acquisition costs
compared with other media. The diversification of
the Group both in the number of verticals that it
operates in and the range of products and services
it provides in each vertical should lessen the impact
of any consolidation of providers.
The Group continues to focus on building strong
Providers may decide to withdraw their
products from price comparison websites or relationships with providers to ensure the Group is
reduce their customer acquisition activity via able to provide solutions to the needs of providers
price comparison websites. This may reduce and to maximise the opportunities for providers to
Group revenue and the customer proposition acquire customers in a cost effective manner.
of price comparison websites.
The Group has continued to diversify its cash
The Group holds significant cash balances.
holdings across a number of financial institutions in
A failure of a major financial institution with
whom the Group places significant deposits accordance with it’s approved treasury policy. At
may result in a material loss to the Group.
the end of 2009, the Group held cash balances with
five financial institutions with a maximum balance
of £18.0m with any one institution.
The Group will continue to perform independent
Significant reduction of or a failure to
recognise revenue from contracted providers reviews using third parties to gain assurance that
the Group is being correctly remunerated for the
where the Group is remunerated on a cost
sales it introduces to contracted providers.
per action basis.
Investments in new areas typically leverage existing
expertise and experience built up over many
years. Capital requirements are relatively low and
investment is managed in stages such that it is not
finally committed until there is good visibility of a
return.
The Group has a team of regulatory specialists who
The business model in financial services or
other lines of business may be compromised work with the business to ensure that it remains
compliant with existing regulation and informed of
by changes to existing regulation or the
impending regulation. The Group has embraced
introduction of new regulation, or changes
to the tax legislation, particularly value added regulation to date and shares the vision of the
regulators generally to make the market more
tax.
transparent to the end customer.
Significant capital invested in new products
and services or new geographies fails to
make a return.
The Group continues to monitor ongoing European
Union developments in respect of the review of the
provision of financial intermediary services with
regard to value added tax and any relevant case
law in this area as it emerges.
22
Business Overview
Risk area
Competitive
environment
Reliance on search
engine paid search
and natural listings
23
General
Economic
environment
Loss of key
management
Capacity and
functionality of IT
and systems
infrastructure
Mitigation
The Group continues to focus on building market
leading products to improve its proposition to
customers. This includes investment in customer
retention tools and technology including CRM
initiatives which deliver additional features and
functionality to customers.
Continued investment in television advertising
Reduction in customer loyalty with existing
reinforced through press activity will maintain the
customers and an inability to attract new
customers if the business fails to maintain its Group in customers’ minds. Rigorous checking of
the website through audit and review will maintain
position as a leading price comparison
the accuracy of the information displayed. Rigorous
website or if its reputation is negatively
use of internal controls and testing of the Group’s
impacted by any event.
systems will ensure the integrity and robustness of
the Group’s systems. Additional investment in
initiatives increases transparency to the customer
helping to protect brand values.
Failure to provide adequate service levels to The Group maintains two separate data centres
with n + 1 redundancy in relation to its core
customers or maintain revenue generating
infrastructure to ensure that service is maintained
services.
in the event of a disaster at the primary data centre.
Developed software is rigorously tested and the
Group operates a robust release process which
mitigates the likelihood of software being released
into a live environment without being fully tested.
Loss of key management resulting in a lack of Existing key management and new hires are tied in
necessary expertise or continuity to execute through attractive equity incentive packages and
rewarding career structures. In addition, succession
strategy.
plans have been developed for key members of the
management team which are regularly reviewed.
Reduction in gross margin through reduction The Group will continue to invest in sustainable
search engine optimisation activities which adhere
in revenue derived from search engine
to search engine guidelines. The Group will
optimisation or failure to manage search
continue to use a software solution to assist in
engine marketing campaigns appropriately.
managing the profitability of search engine
marketing campaigns.
The Group continues to focus on building a wide
Reduction in visitors and revenue from a
recession as customers seek to reduce levels range of market leading products to meet
customers needs. Customers seeking to reduce
of discretionary expenditure.
levels of discretionary expenditure will also be
looking to obtain ‘best’ value from compulsory
products and services. The diversification of the
Group both in the number of verticals that it
operates in and the range of products and services
it provides in each vertical should lessen the impact
of a recession upon the Group although it cannot
entirely mitigate against it.
Management
Brand perception
Potential impact
Loss of market share and erosion of margins
from increased competition.
Business Review
Operational risks
Management
Board of Directors and Company Secretary
Gerald Corbett (a,b,c)
Chairman of the Board and Chairman of the
Nomination Committee
Gerald was appointed Chairman of the Board in June
2007. He has been chairman of SSL International plc
since August 2005 and chairman of Britvic plc since
November 2005. Gerald is also a non-executive director
of Numis Corporation Plc and is chairman of the board
of trustees of the Royal National Institute for the Deaf.
Gerald was a non-executive director of Greencore
Group plc from 2004 to 2010, chairman of Woolworths
Group plc from 2001 to 2007, chief executive of
Railtrack plc from 1997 to 2000 and group finance
director of Grand Metropolitan plc from 1994 to 1997.
Peter Plumb
Peter was appointed an Executive Director in January
2009 and became Chief Executive Officer of the Group
in February 2009. Prior to joining the Group, Peter was
the UK managing director of dunnhumby Limited
between 2006 and 2008 and was previously general
manager of Europe Disney Consumer Products,
international director of Dyson Appliances Limited and
held commercial roles at PepsiCo International.
24
Simon Nixon
Deputy Chairman
Simon co-founded the Group’s business in 1993 and
since then has been involved in the management and
development of the business including the launch of
moneysupermarket.com in 1999 and travelsupermarket.
com in 2004. Simon was appointed to the Board as
Chief Executive Officer in April 2007 and became
Executive Deputy Chairman in February 2009.
Paul Doughty
Chief Financial Officer
Paul joined the Group in 2004 as Chief Financial Officer.
He previously had commercial finance experience with
Motorola Limited, National Power plc and Morse plc. He
is a qualified Chartered Accountant having trained and
qualified at Price Waterhouse. Paul was appointed to the
Board in April 2007.
Business Overview
Business Review
General
Darren Drabble
Company Secretary and General Counsel
Darren joined the Group as Company Secretary and
General Counsel in May 2007. Darren has a corporate
and commercial law background originally qualifying as
a solicitor with Addleshaw Goddard before working as a
senior legal counsel at United Utilities Group PLC.
Rob Rowley (a,b,c)
Independent Non-Executive Director and Chairman
of the Audit Committee
Rob was appointed a Non-Executive Director in
September 2007. Rob has been a non-executive
director of Liberty International plc since 2004 and is
chair of its audit committee and senior independent
director. Rob was appointed a non-executive director of
Taylor Wimpey plc in January 2010. He was formerly
deputy chairman of Cable & Wireless plc between 2003
and 2006 and a non-executive director of Prudential plc
between 1999 and 2006 where he chaired its audit
committee. Rob was previously at Reuters plc from
1978 to 2001 where he was a director between 1990
and 2001.
Michael Wemms (a,b,c)
Senior Independent Non-Executive Director and
Chairman of the Remuneration Committee
Michael was appointed a Non-Executive Director in July
2007. Michael has been a non-executive director of
Galiform plc since 2006 and Inchcape plc since 2004.
He was formerly chairman of the British Retail
Consortium between 2004 and 2006, chairman of
House of Fraser plc between 2001 and 2006 and a
non-executive director of A&D Pharma Holdings N.V.
between 2006 and 2008. Michael was previously an
executive director of Tesco plc between 1989 and 2000.
Graham Donoghue
Managing Director, Insurance, Home Services and Travel
Graham joined the Group in 2008 as Managing Director,
Travel and was appointed an Executive Director in
February 2009. He was appointed Managing Director,
Insurance, Home Services and Travel in June 2009. Prior
to joining the Group, Graham was new media director of
TUI Travel plc between 2006 and 2008.
Management
David Osborne
Marketing Director
David was appointed an Executive Director in February
2009. Between 2005 and 2009, David was UK regional
general manager at easyJet. He previously worked in
senior marketing roles at ING Direct, Orange, Amazon.
co.uk and Diageo.
a Member of the Audit Committee
b Member of the Remuneration Committee
c Member of the Nomination Committee
25
Corporate Responsibility Report
The Group operates with an underlying awareness of its
wider responsibilities to society.
Communities and charities
The Group’s .Community initiative was launched in 2008
and has continued to develop throughout 2009. The
initiative is focused on providing support to charities
located within a few miles of the Group’s offices in
Ewloe and so support is targeted primarily in Flintshire
and Cheshire.
A volunteer group of employees meet each month to
review requests for donations from charities and to
allocate funds according to agreed donation guidelines.
Employees are also active in researching and seeking
out local good causes that the Group can help support.
The initiative has been effective at harnessing the
energy and enthusiasm of the Group’s employees to
benefit the communities in which it operates.
In 2009 the Group made £2,000 per month available
for the .Community initiative. This funding has been
channelled via the Charities Aid Foundation, enabling
the Group to make gross donations to registered
charities.
Over the course of the year the Group has supported
the following 17 charities:
Hawarden Air Cadets
The Money Advice Trust
Blacon Children’s Centre
Jolly Tots
Daffodils
Highway Playdays
Save The Family
Blacon Community Trust
Clatterbridge Centre for Oncology
Age Concern (Cheshire)
North West Air Ambulance
Bryn Gwallia
Macmillan Cancer Support (Cheshire)
Chester Youth Club
Domestic Abuse Safety Unit Deeside
C-Saw
Deafness Support Network
the Hospice of the Good Shepherd. The Hospice, which
is on the outskirts of Chester, exists to provide highly
specialised palliative care for people living with
advanced diseases from the communities of Chester,
Deeside, Ellesmere Port and rural Cheshire. Over the
course of the year the Group’s employees raised
£6,003 for the Hospice through a wide variety of
fundraising events. The Group made a donation of
£6,020 bringing the total donated to the Hospice
during the year to £12,023.
Employees have selected Hope House Childrens’
Hospice as its 2009/10 Charity of the Year. The charity
runs two centres, in Shropshire and Conwy, serving the
North West of England and North Wales. The Hospice
provides free care to terminally ill children and their
families. Over the course of the year the Group’s
employees raised £522 for Hope House with the Group
donating £3,624, bringing the total donated to Hope
House during the year to £4,146.
Environment
The Group strives to reduce energy and raw material
usage to support environmental and financial
performance.
The Group has chosen not to set environmental key
performance indicators due to its relative size and the
limited impact it has on the environment. The Group
does however participate in the Carbon Disclosure
Project.
Employees
The Group actively encourages employee involvement
and consultation and places considerable emphasis on
keeping its employees informed of the Group’s activities
via formal half yearly business performance updates,
regular update briefings, regular team meetings, the
Group’s intranet site which enables easy access to the
latest Group information as well as Group policies, and
the circulation to employees of relevant information
including corporate announcements. This also helps to
achieve a common awareness amongst employees of
the financial and economic factors affecting the
performance of the Group.
The Group also works with local organisations to
promote financial inclusion and awareness. The Group is
involved in the North Wales Financial Capability Forum
and over the course of the year has worked with
Flintshire Trading Standards to hold surgeries for
consumers on loans and debt, and with Deeside Citizens
Advice to help people in fuel poverty.
The Group has established an employee forum through
which nominated representatives ensure that
employees’ views are taken into account regarding
issues that are likely to affect them. A robust employee
engagement survey process is also in place to ensure
that employees are given a voice in the organisation
and that the Group can take action based on
employee feedback.
In addition to the .Community initiative, the Group and
its employees continues to select and support a charity
on an annual basis. The 2008/9 Charity of the Year was
The Group is committed to an equal opportunities
policy. The Group aims to ensure that no employee is
discriminated against, directly or indirectly, on the
26
Business Overview
grounds of colour, race, ethnic and national origins,
sexual orientation or gender, marital status, disability,
religion or belief, being part time or on the grounds of age.
Business Review
The Group recognises the importance of health and
safety and the positive benefits to the Group. Therefore
the Group’s commitment to health and safety makes
good business sense. The Group has a health and safety
policy which is communicated to all employees through
a health and safety handbook, which is regularly
reviewed and updated.
Management
Supporting students
In order to build links between the Group and local
schools and colleges, work experience and placements
are offered to a number of students. In doing so, the
Group strives to make work placements positive,
challenging and relevant to participants’ current studies
and their future job prospects.
Customers
The Group is committed to providing a high quality
price comparison service to its customers, enabling
them to compare a wide range of products in the
money, insurance, travel and home services markets,
and to find the product most suited to their needs.
To maintain high levels of customer satisfaction, the
Group is constantly assessing the views of its customers
and undertaking customer testing of its websites and
any new developments it makes. The Group provides
customers with information from a wide variety of
sources such as editorial content, customer and expert
reviews, forums and community features to enrich their
experience and to help them find the product most
suited to their needs.
General
27
Directors’ Report
The Directors present their report and the Group
and Company Financial Statements of
Moneysupermarket.com Group PLC (the ‘Company’)
and its subsidiaries (together the ‘Group’) for the
financial year ended 31 December 2009.
dividend paid in respect of the 2008 financial year and a
special dividend of 4.91p per ordinary share. If approved
by shareholders at the forthcoming Annual General
Meeting, this will be paid on 1 April 2010 to shareholders
on the register at the close of business on 5 March 2010.
Principal activities
The Company is a public limited company incorporated
in England, registered number 6160943, with its
registered office at Moneysupermarket House,
St David’s Park, Ewloe, Chester, CH5 3UZ.
The final dividend, together with the interim and special
dividend paid on 16 October 2009, makes a total
dividend for the year of 13.34p (2008: 3.5p) per
ordinary share.
The principal activity of the Group is the introduction of
business to financial, insurance, travel, home services
and other product providers through its websites,
moneysupermarket.com and travelsupermarket.com.
The principal activity of the Company is that of a
holding company.
A fuller description of business activities is contained
within the Financial and Business Review on pages
14 to 21.
Business review
The Chairman’s Statement on page 8, the Chief
Executive’s Report on pages 10 to 13, the Financial and
Business Review on pages 14 to 21 and the Principal
Risks and Uncertainties on pages 22 and 23 provide a
detailed review of the Group’s activities, likely future
developments and principal risks and uncertainties. All
the information detailed in those pages is incorporated
by reference into this report and is deemed to form part
of this report.
As at the date of this report, there have been no
important events affecting the business of the Group
which have occurred since 31 December 2009.
Corporate governance
The Corporate Governance Report, the Audit
Committee Report, the Nomination Committee Report
and the Directors’ Remuneration Report on pages 33 to
48 are incorporated by reference into this report and are
deemed to form part of this report.
Results and dividends
The Group’s and Company’s audited Financial
Statements for the financial year ended 31 December
2009 are set out on pages 50 to 77.
An interim dividend of 1.3p (2008: 1.3p) per ordinary
share together with a special dividend of 4.93p per
ordinary share was paid to shareholders on 16 October
2009.
The Directors recommend a final dividend of 7.11p
(2008: 2.2p) per ordinary share, comprising a dividend
of 2.2p per ordinary share equivalent to the final
28
Major shareholders
As at the date of this report, the Company had been
notified of the following significant holdings of voting
rights in its ordinary shares in accordance with the
Financial Services Authority’s Disclosure and
Transparency Rules:
Shareholder
Number of ordinary Percentage of
shares/voting ordinary share
rights notified capital notified
Simon Nixon
267,257,021
Coatue Management LLC
45,959,122
BlackRock Inc
33,669,000
Lloyds Banking Group plc
30,353,502
FIL Limited
25,452,692
Capital Research &
Management Company
24,480,000
State Street Nominees Limited 20,581,165
52.76
9.10
6.63
5.98
5.01
4.93
4.14
Share capital and control
As at 31 December 2009, the issued share capital of the
Company comprised a single class of shares referred to
as ordinary shares of 0.02p each. As at 31 December
2009, the authorised share capital of the Company was
£250,000 comprising 1,154,705,882 ordinary shares of
0.02p each and 95,294,118 deferred shares of 0.02p
each, and the issued share capital was £101,506
comprising 507,532,724 ordinary shares of 0.02p each.
Full details of the share capital of the Company and
changes to the share capital during the year are set out
in note 15 to the Group Financial Statements on pages
67 and 68. All the information detailed on this page is
incorporated by reference into this report and is
deemed to form part of this report.
At the Annual General Meeting of the Company held on
16 April 2009, shareholders authorised the Directors to
allot up to 336,230,000 ordinary shares in the capital of
the Company. Directors will seek authority from
shareholders at the forthcoming Annual General
Meeting to allot up to 338,010,000 ordinary shares.
On a show of hands at a general meeting of the
Company, every holder of ordinary shares present in
person or by proxy, and entitled to vote, shall have one
vote and, on a poll, every holder of ordinary shares
present in person or by proxy, and entitled to vote, shall
The Company is not aware of any agreements between
shareholders that may result in restrictions on the
transfer of securities and/or voting rights.
29
General
Save in respect of Peter Plumb’s service agreement
(details of which are set out on page 45) and provisions
of the Company’s share schemes which may cause
options and awards granted to employees under such
schemes to vest on a takeover, there are no agreements
between the Company and its Directors or employees
The Company and Simon Nixon entered into a
relationship agreement on 11 July 2007 to regulate the
ongoing relationship between them (‘Relationship
Agreement’). The Company and Simon Nixon have
agreed in the Relationship Agreement that Simon Nixon
is entitled to appoint (such number including himself)
one Non-Executive Director for as long as he holds the
beneficial interest in at least 15% of the ordinary shares
of the Company, two Non-Executive Directors for as
long as he holds the beneficial interest in at least 30% of
the ordinary shares of the Company and three NonExecutive Directors for as long as he holds the beneficial
interest in at least 50% of the ordinary shares of the
Company. The Relationship Agreement will terminate if
Simon Nixon holds less than 15% of the ordinary shares
of the Company. As at the date of this report, Simon
Nixon had not appointed any Non-Executive Directors
pursuant to his rights in the Relationship Agreement.
• Certain restrictions may from time to time be
imposed by laws and regulations (for example, insider
trading laws).
• Pursuant to the Listing Rules of the Financial Services
Authority whereby certain Directors, officers and
employees of the Group require the approval of the
Company to deal in ordinary shares of the Company.
• Pursuant to an underwriting agreement entered into
on 11 July 2007 (‘Underwriting Agreement’) in
connection with the listing of the Company on 31 July
2007 (‘Listing’), each of Simon Nixon and Paul
Doughty have agreed that, subject to certain
exceptions, they will not, without the prior written
consent of Credit Suisse Securities (Europe) Limited,
directly or indirectly, sell or otherwise dispose of, any
ordinary shares in the capital of the Company in
excess of the numbers specified below:
–– In the period between 1 August 2008 and 31 July
2009, up to one third of the number of ordinary
shares owned by them as at Listing (assuming for
these purposes that any options held by them over
ordinary shares had been exercised at Listing).
2010, up to two thirds of the number of ordinary
shares owned by them as at Listing, less any
ordinary shares previously disposed of in
accordance with the Underwriting Agreement as
set out above (assuming for these purposes that
any options held by them over ordinary shares had
been exercised at Listing).
• Pursuant to lock-up deeds in favour of the Company,
certain of the senior managers of the Group have
agreed that, subject to certain exceptions, they will
not, without the prior written consent of the
Company, directly or indirectly, sell or otherwise
dispose of, any ordinary shares in the capital of the
Company in excess of the numbers specified below:
2009, up to one third of the number of ordinary
Management
There are no restrictions on the transfer of ordinary
shares in the Company other than:
Under the rules of the Moneysupermarket.com Group
PLC Share Incentive Plan (‘Plan’), eligible employees
were provided with the opportunity to receive ‘free’
shares on Listing with a value as at the date of Listing of
£3,000, and all employees are entitled to purchase
ordinary shares in the Company using money deducted
from their pre-tax salary. Plan shares are held in trust for
participants by Capita IRG Trustees Limited (‘Trustees’).
Voting rights are exercised by the Trustees on receipt of
participants’ instructions. If a participant does not
submit an instruction to the Trustees, no vote is
registered. In addition, the Trustees do not vote on any
unawarded or forfeit shares held under the Plan as
surplus assets. As at the date of this report, the Trustees
held 0.18% of the issued ordinary share capital of the
Company.
Business Review
The notice of the Annual General Meeting specifies
deadlines for exercising voting rights and appointing a
proxy or proxies to vote in relation to resolutions to be
passed at the Annual General Meeting. All proxy votes
are counted and the numbers for, against or withheld in
relation to each resolution are announced at the Annual
General Meeting and published on the Company’s
website after the meeting.
shares owned by them as at Listing (assuming for
these purposes that any options held by them over
ordinary shares had been exercised at Listing).
2010, up to two thirds of the number of ordinary
shares owned by them as at Listing less any
ordinary shares previously disposed of in
accordance with the lock-up deeds as set out
above (assuming for these purposes that any
options held by them over ordinary shares had
been exercised at Listing).
Business Overview
have one vote for every ordinary share held. Except in
very limited circumstances, the holders of deferred
shares are not entitled to attend or vote at a general
meeting of the Company. There are no issued shares in
the Company with special rights with regard to control
of the Company.
Directors’ Report continued
providing for compensation for loss of office or
employment (whether through resignation, purported
redundancy or otherwise) that occurs because of a
takeover bid.
Save in respect of the Company’s share schemes, there
are no significant agreements to which the Company is
a party that take effect, alter or terminate upon a
change of control following a takeover bid.
The Company’s Articles of Association may only be
amended by a special resolution at a general meeting
of shareholders. At the forthcoming Annual General
Meeting a special resolution will be put to shareholders
proposing amendments to the Company’s existing
Articles of Association as described in the notice
of meeting.
Authority to purchase own shares
At the Annual General Meeting of the Company held on
16 April 2009, shareholders authorised the Company to
purchase, in the market, up to 50,485,606 of its own
ordinary shares either to be cancelled or retained as
treasury shares. As at the date of this report, the
Company had not purchased any of its own ordinary
shares in the market.
Directors will seek authority from shareholders at the
forthcoming Annual General Meeting for the Company
to purchase, in the market, up to 50,753,272 of its own
ordinary shares either to be cancelled or retained as
treasury shares. The Directors will only use this power
after careful consideration, taking into account the
financial resources of the Company, the Company’s
share price and future funding opportunities. The
Directors will only purchase such shares after taking into
account the effects on earnings per share and the
interests of shareholders generally.
Research and development
Innovation is important to the future success of the
Group and to the delivery of long term value to
shareholders. The Group’s research and development
expenditure is predominantly associated with computer
and internet software systems. Successfully developed
software is used to develop new products and to
improve and extend the functionality and scope of the
Group’s internet operations.
Going concern
After making appropriate enquiries, the Directors have a
reasonable expectation that the Company, and the
Group as a whole, have adequate resources to continue
in operational existence for the foreseeable future.
Accordingly, the Financial Statements have been
prepared on a going concern basis.
30
Directors
The following persons were Directors of the Company
during the financial year ended 31 December 2009:
Gerald Corbett, Simon Nixon, Peter Plumb (appointed 1
January 2009), Paul Doughty, David Osborne
(appointed 23 February 2009), Graham Donoghue
(appointed 23 February 2009), Michael Wemms and
Rob Rowley. Their biographical details are set out on
pages 24 and 25.
Subject to law and the Company’s Articles of
Association, the Directors may exercise all of the powers
of the Company and may delegate their power and
discretion to committees.
The Company’s Articles of Association give the
Directors power to appoint and replace Directors. Under
the terms of reference of the Nomination Committee,
any appointment to the Board of the Company must
be recommended by the Nomination Committee for
approval by the Board. The Articles of Association also
require Directors to retire and submit themselves for
re-election at the first Annual General Meeting following
their appointment and to stand for re-election at
least every three years following their election or
last re-election.
In accordance with the Company’s Articles of
Association, Simon Nixon, Michael Wemms and Rob
Rowley will retire at the forthcoming Annual General
Meeting and, being eligible, will offer themselves for
re-election.
Directors’ remuneration
The Remuneration Committee, on behalf of the Board,
has adopted a policy that aims to attract and retain the
Directors needed to run the Group successfully. Details
of the Directors’ remuneration is set out in the Directors’
Remuneration Report on pages 41 to 48.
Directors’ interests
Details of the Directors’ and their connected persons’
interests in the ordinary shares of the Company are set
out in the Directors’ Remuneration Report on pages 41
to 48. No Director has any other interest in any shares or
loan stock of any Group company.
The details of transactions with Directors of the
Company and related party transactions in the financial
year ended 31 December 2009 are set out in note 20 to
the Group Financial Statements on pages 71 and 72 and
the Corporate Governance Report on pages 33 to 37.
During the year, no Director had any material interest in
any contract of significance to the Group’s business.
Directors’ and officers’ insurance and indemnities
During the financial year ended 31 December 2009 and
up to the date of this report, the Company has maintained
liability insurance for its Directors and officers.
Internal control
The Corporate Governance Report and Audit
Committee Report on pages 33 to 39 includes the
Board’s assessment of the Group’s system of internal
controls and consideration of the guidance issued by
the Turnbull Committee of the Institute of Chartered
Accountants of England and Wales.
31
General
Employees
The Group places considerable value on the involvement
of its employees and uses a number of ways to engage
with employees on matters that impact them and the
performance of the Group. These include formal half
yearly business performance updates by members of
the executive management team for all employees,
regular update briefings for all employees, regular team
meetings, the Group’s intranet site which enables easy
access to the latest Group information as well as Group
policies, and the circulation to employees of results
announcements and other corporate announcements.
This also helps to achieve a common awareness
amongst employees of the financial and economic
factors affecting the performance of the Group.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the Company and enable them to ensure that its
Financial Statements comply with the Companies Act
2006. They have general responsibility for taking such
• The Financial Statements, prepared in accordance
with the applicable set of accounting standards, give
a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company and the
undertakings included in the consolidation taken as a
whole.
• The Business Review includes a fair review of the
development and performance of the business and
the position of the Company and the undertakings
included in the consolidation taken as a whole,
together with a description of the principal risks and
uncertainties that they face.
• Select suitable accounting policies and then apply
them consistently.
• Make judgements and estimates that are reasonable
and prudent.
• For the Group Financial Statements, state whether
they have been prepared in accordance with IFRSs as
adopted by the EU.
• For the Company Financial Statements, state whether
applicable UK Accounting Standards have been
followed, subject to any material departures disclosed
and explained in the Company Financial Statements.
• Prepare the Financial Statements on the going
concern basis unless it is inappropriate to presume
that the Group and the Company will continue in
business.
Statement of Directors’ responsibilities pursuant to
Disclosure and Transparency Rules 4.1.12
Each of the Directors whose names and functions are
set out on pages 24 and 25 confirm that, to the best of
their knowledge:
Under company law the Directors must not approve the
Financial Statements unless they are satisfied that they
give a true and fair view of the state of affairs of the
Group and Company and of their profit or loss for that
period. In preparing each of the Group and Company
Financial Statements, the Directors are required to:
The Directors are responsible for the maintenance and
integrity of the corporate and financial information
included on the Company’s website. Legislation in
the UK governing the preparation and dissemination
of financial statements may differ from legislation in
other jurisdictions.
Management
Company law requires the Directors to prepare Group
and Company Financial Statements for each financial
year. Under that law they are required to prepare the
Group Financial Statements in accordance with IFRSs
as adopted by the EU and applicable law and have
elected to prepare the Company Financial Statements
in accordance with UK Accounting Standards and
applicable law (UK Generally Accepted
Accounting Practice).
Under applicable law and regulations, the Directors are
also responsible for preparing a Directors’ Report,
Directors’ Remuneration Report and Corporate
Governance Report that complies with that law and
those regulations.
Business Review
Statement of Directors’ responsibilities in respect of
the Annual Report and the Financial Statements
The Directors are responsible for preparing the Annual
Report and the Group and Company Financial
Statements in accordance with applicable law
and regulations.
steps as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect fraud and
other irregularities.
Business Overview
The Company has granted indemnities to each of its
Directors and the Company Secretary to the extent
permitted by law and its Articles of Association.
Qualifying third party indemnity provisions and
qualifying pension scheme indemnity provisions were in
force with effect from 14 December 2009 and remain in
force as at the date of this report in relation to certain
losses and liabilities which the Directors or Company
Secretary may incur in the course of acting as Directors,
Company Secretary or employees of the Company or of
any associated company.
Directors’ Report continued
The Group has established an employee forum through
which nominated representatives ensure that
employees’ views are taken into account regarding
issues that are likely to affect them. A robust employee
engagement survey process is also in place to ensure
that employees are given a voice in the organisation
and that the Group can take action based on
employee feedback.
All employees are able to participate in the
Moneysupermarket.com Group PLC Share Incentive Plan
which gives employees the opportunity to purchase
ordinary shares in the Company using money deducted
from their pre-tax salary on a monthly basis. This helps
to encourage employee interest in the performance of
the Group.
Equal opportunities
The Group is committed to providing equality of
opportunity to all employees without discrimination
and applies fair and equitable employment policies
which seek to promote entry into and progression within
the Group. Appointments are determined solely by
application of job criteria, personal ability, behaviour
and competency.
Disabled persons
Disabled persons have equal opportunities when
applying for vacancies, with due regard to their skills
and abilities. Procedures ensure that disabled employees
are fairly treated in respect of training and career
development. For those employees becoming disabled
during the course of their employment, the Group is
supportive so as to provide an opportunity for them to
remain with the Group, wherever reasonably practicable.
In the opinion of the Directors, all employee policies are
deemed to be effective and in accordance with their
intended aims.
Creditor payment policy
It is Group policy to agree terms and conditions for its
business transactions with suppliers. Payment is made in
accordance with these terms provided the supplier
meets its obligations. The average number of trade
creditor days outstanding for the Group at 31 December
2009 was 58.4 (2008: 49.5) days. The Company is a
holding company and therefore had no trade creditors
at 31 December 2009 (2008: nil).
Disclosure of information to auditors
The Directors who held office at the date of this report
confirm that, so far as they are each aware, there is no
relevant audit information of which the Company’s
auditors are unaware; and each such Director has taken
all the steps that he ought to have taken as a Director to
make himself aware of any relevant audit information,
and to establish that the Company’s auditors are aware
of that information.
Auditors
KPMG Audit Plc have indicated their willingness to
accept reappointment as auditors of the Company. A
resolution proposing their reappointment is contained in
the notice of the forthcoming Annual General Meeting
and will be proposed to shareholders at that meeting.
Annual General Meeting
The forthcoming Annual General Meeting of the
Company will be held at De Vere Carden Park Hotel,
near Chester, Cheshire, CH3 9DQ on Wednesday
31 March 2010 at 10.30am.
The notice convening the forthcoming Annual General
Meeting of the Company, with details of the business to
be transacted at the meeting and explanatory notes, is
set out in a separate circular which has been sent to all
shareholders at the same time as this report.
By order of the Board
Borrowings
The Group did not have any borrowings during the
financial year ended 31 December 2009 (2008: £nil).
Financial risk management
It is the Group’s objective to manage its financial risk so
as to minimise the adverse fluctuations in the financial
markets on the Group’s profitability and cash flow. The
specific policies for managing each of the Group’s main
financial risk areas are set out in note 16 to the Group
Financial Statements on page 68.
Political and charitable donations
During the financial year ended 31 December
2009, the Group did not make any political donations
(2008: £nil) and made charitable donations of £33,379
(2008: £24,482).
32
Darren Drabble
Company Secretary
23 February 2010
Corporate Governance Report
33
General
Relationship Agreement
The majority shareholder of the Company is Simon
Nixon. The Company and Simon Nixon entered into a
relationship agreement on 11 July 2007 to regulate the
ongoing relationship between them (‘Relationship
Agreement’). The principal purpose of the Relationship
Agreement is to ensure that the Company is capable
of carrying on its business independently of Simon
Nixon, and that transactions and relationships with
Simon Nixon are at arm’s length and on normal
commercial terms.
Independence/Non-Executive Directors
The Chairman and the Non-Executive Directors bring
wide and varied commercial experience to Board and
Committee deliberations. The practice of the Company
is to appoint Non-Executive Directors for specified
terms of three years, subject to a maximum of up to 12
months’ notice within that period and also subject to
re-election and to Companies Act provisions relating to
the removal of a Director. Each of the Non-Executive
Directors, including the Chairman, currently holds a
letter of appointment reflecting this.
The Board considers that all the Directors are able to
devote sufficient time to their duties as Directors.
Biographies of the Board are set out on pages 24 and
25 including details of the significant commitments of
the Chairman. The Board is satisfied that these
appointments do not conflict with the Chairman’s ability
to carry out his duties and responsibilities effectively for
the Group.
Conflicts of interest
The Company’s Articles of Association were amended
at the 2008 Annual General Meeting, in line with the
Companies Act 2006, to allow the Board to authorise
potential conflicts of interest that may arise and to
impose limits or conditions, as appropriate, when giving
any authorisation. Any decision of the Board to
authorise a conflict of interest is only effective if it is
agreed without the conflicted Directors voting or
without their votes being counted and in making such a
decision, the Directors must act in a way they consider
in good faith will be most likely to promote the success
of the Company. The Company has established a
procedure for the appropriate authorisation to be
sought prior to appointment of any new Director or
prior to a new conflict arising and for the regular review
of actual or potential conflicts of interest. During
the year, this procedure was adhered to and
operated effectively.
The Board normally meets on at least eight occasions in
each financial year including a two day strategy
conference. To enable the Non-Executive Directors to
more freely discuss the performance of the Group’s
management, the Chairman meets with the NonExecutive Directors at least once each year without the
Executive Directors present.
Management
Board of Directors
The Board currently has eight members, comprising the
Non-Executive Chairman, Gerald Corbett, two
Independent Non-Executive Directors, Michael Wemms
and Rob Rowley, and five Executive Directors, Simon
Nixon, Paul Doughty, Peter Plumb, Graham Donoghue
and David Osborne. Michael Wemms has been
designated as the Senior Independent Non-Executive
Director.
When determining the Chairman’s independence on
appointment, the Board had regard to his share award
(‘Share Award’). Under the Share Award, Gerald Corbett
purchased ordinary shares in the Company on the listing
of the Company on 31 July 2007 (‘Listing’) at £1.70 per
ordinary share to the value of £200,000 and provided
he completes three years service as Chairman of the
Company from Listing and retains the ordinary shares
he purchased on Listing during that three year period,
he will be entitled to subscribe at nominal value for two
times the number of ordinary shares he purchased on
Listing. The Board believes that the number of ordinary
shares subject to the Share Award is not sufficient to
have an impact on his independence and thus
concludes that the Chairman was independent on
appointment. Shareholder approval was obtained prior
to the entry by the Company into the Share Award.
Business Review
Compliance
The Board considers that the Company has complied
with the provisions of the Combined Code throughout
the year ended 31 December 2009 and to the date of
this report except as set out below.
The Board considers that Gerald Corbett was
independent on appointment as Chairman and
considers Michael Wemms and Rob Rowley to be
independent, being independent in character and
judgement and free from relationships or circumstances
which are likely to affect, or could appear to affect,
their judgement.
Business Overview
The Board of Directors (‘Board’) of
Moneysupermarket.com Group PLC (‘Company’) is
committed to high standards of corporate governance
and supports the principles laid down in the revised
Combined Code on Corporate Governance published in
June 2008 by the Financial Reporting Council
(‘Combined Code’). This Corporate Governance Report
describes how the principles of the Combined Code are
applied by the Company and reports on the Company’s
compliance with the Combined Code’s provisions.
Corporate Governance Report continued
The Company and Simon Nixon have agreed in the
Relationship Agreement that Simon Nixon is entitled to
appoint (such number including himself as a Director)
one Non-Executive Director for as long as he holds the
beneficial interest in at least 15% of the ordinary shares
of the Company, two Non-Executive Directors for as
long as he holds the beneficial interest in at least 30% of
the ordinary shares of the Company and three NonExecutive Directors for as long as he holds the beneficial
interest in at least 50% of the ordinary shares of the
Company. The Relationship Agreement will terminate if
Simon Nixon holds less than 15% of the ordinary shares
of the Company.
The Relationship Agreement also includes a protocol to
be observed in relation to any Non-Executive Director
appointed by Simon Nixon to deal with potential
conflicts of interest and the provision of confidential
information.
As at the date of this report, Simon Nixon had not
appointed any Non-Executive Directors pursuant to his
rights in the Relationship Agreement.
Division of responsibilities
The positions of Chairman and Chief Executive Officer
are not combined, ensuring a clear division of
responsibility at the head of the Company. The division
of roles and responsibilities between the Chairman and
Chief Executive Officer is clearly established, set out in
writing and has been approved by the Board. The
Chairman is responsible for leadership of the Board,
setting its agenda and monitoring its effectiveness. He
ensures effective communication with shareholders and
that the Board is aware of the views of major
shareholders. He facilitates both the contribution of the
Non-Executive Directors and constructive relations
between the Executive and Non-Executive Directors.
The Chief Executive Officer is responsible for the day to
day running of the Group, carrying out agreed strategy
and implementing specific Board decisions.
Role of the Board
The Board is collectively responsible for the Group’s
performance and meets regularly to review the
operation and performance of the Group. The Board has
a formal schedule of matters reserved to it for decision
making and matters delegated to Committees of the
Board which are available on the Group’s website at
www.moneysupermarket.com. These include the
Group’s strategy; business plan and annual budget;
acquisitions and disposals and other major investments
and capital projects.
There is an established procedure for the preparation
and approval each year by the Board of business plans
and the annual budget. The Board receives reports on
performance against the business plan and budget and
reviews any significant variances each time it meets.
This information enables business performance to be
monitored, evaluated, discussed and challenged where
necessary and enables informed, sound decisions to be
made.
Board Committees
The Board has three principal Committees (Audit,
Nomination and Remuneration) to which various
matters are delegated. The Committees all have formal
written terms of reference that have been approved by
the Board and are published on the Group’s website at
www.moneysupermarket.com. They are also available in
hard copy form on application to the Company
Secretary.
Details of the work of the Audit, Nomination and
Remuneration Committees are given in the reports of
those Committees on pages 38 to 48.
The Directors who served on each of the Committees
during the year are set out below:
Committee
Audit
Nomination
Remuneration
34
Chairman
Member
Member
Rob Rowley
Gerald Corbett
Michael Wemms
Gerald Corbett
Michael Wemms
Gerald Corbett
Michael Wemms
Rob Rowley
Rob Rowley
Business Overview
Board and Committee attendance
The attendance record of the Directors at scheduled Board and Committee meetings during the year is set out in
the following table. The Board scheduled 10 meetings during the year and ad hoc conference calls were also
convened to deal with specific matters which required attention between scheduled meetings.
Audit
Committee NominationRemuneration
Committee
Committee
9
10
10
8
9
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Non-Executive Directors
Gerald Corbett
Michael Wemms
Rob Rowley
10
9
10
4
4
4
2
2
2
5
5
5
Total number of scheduled meetings held 10
4
2
5
The Executive Directors of the Company may attend
meetings of the Committees at the invitation of the
Chairman of the respective Committee.
The Directors have access to the advice and services of
the Company Secretary. The Company Secretary is
responsible for ensuring that Board procedures are
followed and providing advice to the Board on corporate
governance. Both the appointment and removal of the
Company Secretary are matters for the Board as a whole.
35
General
Information
Board members are given appropriate documentation in
a timely manner in advance of each Board or
Committee meeting. This normally includes a detailed
report on current trading and full papers on matters
where the Board or Committee will be required to make
a decision or give its approval. Specific business related
presentations are given when appropriate.
Board evaluation
The Board has established a formal process for the
annual evaluation of the performance of the Board, its
Committees and individual Directors. Questionnaires
were prepared which provided the framework for the
evaluation process. Each Director completed the
questionnaires commenting on the performance of the
other Directors, the Board and each Committee and
submitted the completed questionnaires for collation.
Utilising the responses to the questionnaires, the
Chairman has conducted interviews with each Director
and assessed their individual performance. The
Chairman has carried out an evaluation of the
performance of the Board as a whole and of each
Committee and, led by the Senior Independent NonExecutive Director, the Non-Executive Directors have
met and assessed the performance of the Chairman
taking into account the views of the Executive Directors.
The Company provides Directors’ and officers’ insurance
cover for the benefit of Directors in respect of claims
arising in the performance of their duties. With effect
from 14 December 2009, the Company has also granted
indemnities to each of its Directors and the Company
Secretary to the extent permitted by law and its Articles
of Association.
Development
The Chairman and Company Secretary are responsible for
preparing and implementing an induction programme for
Directors, including guidance as to their duties,
responsibilities and liabilities as a Director of the Company
and business familiarisation. Business familiarisation
involves Directors visiting the Company’s offices and
giving the Directors the opportunity to meet the
executive management team and other senior managers
in the business. They also have the opportunity to discuss
organisational, operational and administrative matters.
Every Director has access to appropriate training as
required following their appointment.
Directors
The Company’s Articles of Association require that new
Directors appointed by the Board must retire and
submit themselves for re-election by shareholders at the
next Annual General Meeting following their
appointment. The Company’s Articles of Association
further require that all Directors must retire and submit
themselves for re-election at least every three years.
The conclusions of those evaluations have been
presented to the Board by the Chairman and the Senior
Independent Non-Executive Director. The evaluation
process is designed to cover Board processes, the
structure and capability of the Board, strategic
alignment, Board dynamics and the skills brought to the
Board by each Director. The Board evaluation process
confirmed that the Board and its Committees were
operating effectively.
Management
Executive Directors
Simon Nixon
Peter Plumb
Paul Doughty
Graham Donoghue
David Osborne
Business Review
Board Corporate Governance
Corporate Governance Report continued
Directors can, where they judge it necessary to
discharge their responsibilities as Directors, obtain
independent professional advice at the Company’s
expense. Directors have the right to require that any
concerns they may have are recorded in the appropriate
Board or Committee minutes.
Shareholder relations
The Board is committed to establishing and maintaining
good communications with shareholders. Senior
executives, including the Chairman, Chief Executive
Officer and Chief Financial Officer regularly meet with
analysts and institutional shareholders to keep them
informed of significant developments and to develop an
understanding of their views which are reported back to
the Board. Formal presentations are given to analysts
and shareholders covering the full year and half year
results. The Company Secretary deals with questions
from individual shareholders.
The results and results presentations, together with all
information reported to the market via the regulatory
information service, press releases and other
shareholder information, are published on the Group’s
website at www.moneysupermarket.com to be viewed
and accessed by all shareholders.
The Senior Independent Non-Executive Director,
Michael Wemms, is available to shareholders if they have
concerns which contact through the normal channels of
Chairman, Chief Executive Officer or Chief Financial
Officer has failed to resolve, or for which such contact
is inappropriate.
All shareholders will have the opportunity to ask
questions at the forthcoming Annual General Meeting.
The Chairmen of the Audit, Nomination and
Remuneration Committees will be available to answer
questions at that meeting. Shareholders may also
contact the Chairman, the Chief Executive Officer or,
if more appropriate, the Senior Independent NonExecutive Director to raise any issue with one or all of
the Non-Executive Directors of the Company.
The Company will prepare separate resolutions on each
substantially separate issue at the forthcoming Annual
General Meeting. The result of the vote on each
resolution will be published on the Group’s website after
the Annual General Meeting and will be announced via
the regulatory information service.
Internal control and risk management
The Board is responsible for the Group’s system of
internal control and risk management and for reviewing
its effectiveness. The system of internal control is
designed to manage rather than eliminate the risk of
failure to achieve business objectives and can only
36
provide reasonable and not absolute assurance against
material misstatement or loss.
The key features of the Group’s system of internal
control and risk management are:
• A comprehensive annual business planning and
budgeting process, requiring Board approval, against
which the Group’s actual performance and any
significant variances are regularly reviewed by the
Board.
• A schedule of matters reserved for the Board’s
approval to ensure it maintains control over
appropriate strategic, financial, organisational,
compliance and capital investment issues.
• An organisation structure with clearly defined lines of
responsibility and delegation of authority.
• Regular reviews by management and the Audit
Committee of the key risks facing the Group and the
actions being taken to mitigate and manage them.
• An annual two day strategy conference to discuss
and approve the Group’s strategic direction, plans
and objectives and the risks to achieving them.
In addition, the Audit Committee receives:
• Reports from the external auditors in relation to the
Financial Statements and the material financial
reporting judgements contained in them.
• Reports from the external auditors in relation to the
system of internal control and the reviews by the
external auditors of that system.
The Audit Committee has conducted a review of the
effectiveness of the Group’s system of internal control
and risk management during the financial year ended 31
December 2009. The Board considers that in the
context of the control environment described above, the
Group’s system of internal control and risk management
is effective and satisfactory.
Compliance with the Combined Code
The Directors consider that during the financial year
ended 31 December 2009 and to the date of this report,
the Company complied with the Combined Code except
as follows:
A.3.2 – During the year at least half the Board, excluding
the Chairman, did not comprise Independent NonExecutive Directors. The Company is continuing the
process, with the assistance of an external search
company, to appoint additional Independent NonExecutive Directors.
B.2.1 – The Remuneration Committee does not currently
comprise at least three Independent Non-Executive
Directors. The Company is continuing the process, with
the assistance of an external search company,
Business Overview
to appoint additional Independent Non-Executive
Directors. It is currently anticipated that at least one of
the appointees will become a member of the
Remuneration Committee.
Business Review
C.3.1 – The Audit Committee does not currently
comprise at least three Independent Non-Executive
Directors. The Company is continuing the process, with
the assistance of an external search company, to
appoint additional Independent Non-Executive
Directors. It is currently anticipated that at least one of
the appointees will become a member of the Audit
Committee.
Management
D.1.1 – As a result of regular feedback provided to the
Board by the Chairman, Chief Executive Officer and
Chief Financial Officer following their dialogue with
major shareholders, the Senior Independent NonExecutive Director believes he is aware of the views of
major shareholders. Unless requested by major
shareholders, the Senior Independent Non-Executive
Director does not attend meetings with them.
This report was approved by the Board and signed on
its behalf by:
Darren Drabble
Company Secretary
23 February 2010
General
37
Audit Committee Report
The Audit Committee presents a separate report in
relation to the financial year ended 31 December 2009.
Composition of the Audit Committee
The Audit Committee comprises the three NonExecutive Directors, Rob Rowley (Chairman of the Audit
Committee), Gerald Corbett and Michael Wemms. Rob
Rowley and Michael Wemms are considered by the
Board to be independent. Gerald Corbett was
considered by the Board to be independent on
appointment. Biographies of the members of the Audit
Committee are set out on pages 24 and 25. Rob Rowley
is a qualified accountant and was formerly finance
director of Reuters plc and chairman of the audit
committee at Prudential plc. He is currently chairman of
the audit committee at Liberty International plc. The
Board is satisfied that Rob Rowley has recent and
relevant financial experience.
Operation of the Audit Committee
The Audit Committee met on four occasions during the
year. Details of the attendance at Audit Committee
meetings are set out in the Corporate Governance
Report on page 35.
The Chief Executive Officer and Chief Financial Officer,
together with the external auditors, will normally attend
meetings at the invitation of the Chairman of the Audit
Committee. The external auditors are regularly invited
by the Audit Committee to advise them of any matters
which they consider should be brought to the Audit
Committee’s attention without the Executive Directors
present. The external auditors may also request a
meeting with the Audit Committee if they consider
it necessary.
The Company Secretary acts as secretary to the Audit
Committee. The members of the Audit Committee can,
where they judge it necessary to discharge their
responsibilities, obtain independent professional advice
at the Company’s expense.
The Audit Committee’s duties include:
• Monitoring the financial reporting process.
• Monitoring the statutory audit of the Group’s
Financial Statements.
• Reviewing the Group’s Financial Statements and the
material financial reporting judgements contained in
them.
• Monitoring the effectiveness of the Group’s internal
control and risk management systems.
• Reviewing and monitoring the independence of the
external auditors and the provision of additional
services to the Group.
• Advising the Board on the appointment and removal
of the external auditors and the remuneration and
terms of engagement of the external auditors.
• Reviewing the Group’s whistle blowing procedures.
38
The Audit Committee undertakes its activities in line
with an annual work plan. The Audit Committee agrees
the scope of the audit work and discusses the results of
the full year audit and half year review each year.
The terms of reference of the Audit Committee
are published on the Group’s website at
www.moneysupermarket.com and are available in hard
copy form on application to the Company Secretary.
During the year, the Audit Committee reviewed the
Group’s whistle blowing procedures to ensure
arrangements are in place to enable employees to raise
concerns about possible malpractice or wrongdoing by
the Group or any of its employees on a confidential
basis. This includes arrangements to proportionately
and independently investigate such matters and for
appropriate follow-up action.
Internal control and risk management
The Board is responsible for the Group’s system of
internal control and risk management and for reviewing
its effectiveness. The Audit Committee monitors and
undertakes an annual review of the effectiveness of, and
the framework for, the Group’s system of internal control
and risk management. This includes annual
consideration as to whether there is a need to establish
an internal audit function.
The Audit Committee undertook a review of the
effectiveness of, and the framework for, the Group’s
system of internal control and risk management,
including financial, operational and compliance controls
during the year. In addition to this review, the external
auditors provided the Audit Committee with
comprehensive reports of the results of their controls
testing as part of the external audit. On a half yearly
basis, the Audit Committee also reviewed the key risks
facing the Group and the actions being taken by
management to mitigate and manage them.
During the year the Audit Committee considered the
need to establish an internal audit function and
concluded that the control systems are sufficient for the
size and complexity of the Group such that an internal
audit function is not required at this time. This will be
reviewed in 2010.
Review of the work of the external auditors
Subject to the annual appointment of the external
auditors by shareholders, the Audit Committee regularly
reviews the relationship between the Group and the
external auditors. This review includes an assessment
of their performance, cost-effectiveness, objectivity
and independence.
Business Overview
Business Review
The Audit Committee is responsible for ensuring that an
appropriate relationship is maintained between the
Group and the external auditors. The Group has
implemented a policy of controlling the provision of
non-audit services by the external auditors in order to
ensure that their objectivity and independence is
safeguarded. This control is exercised by ensuring that
all non-audit services are subject to the prior approval of
the Audit Committee. During the year, the Audit
Committee continued with the appointment of other
accountancy firms to provide non-audit services to the
Group and anticipates that this will continue in 2010.
Management
The Audit Committee, having considered the external
auditors’ performance during their period in office,
recommends their reappointment. A full breakdown of
the audit and non-audit related fees is set out in note 4
to the Group Financial Statements on page 60. The
Audit Committee discussed the level of fees and
considered them appropriate given the current size of
the Group. The Audit Committee is satisfied that the
level and scope of non-audit services undertaken by the
external auditors does not impair their independence
and objectivity.
its behalf by:
Rob Rowley
Chairman of the Audit Committee
23 February 2010
General
39
Nomination Committee Report
The Nomination Committee presents a separate report
in relation to the financial year ended 31 December 2009.
company, to appoint additional Independent
Non-Executive Directors.
Composition of the Nomination Committee
The Nomination Committee comprises the three
Non-Executive Directors, Gerald Corbett (Chairman of
the Nomination Committee), Michael Wemms and Rob
Rowley. Rob Rowley and Michael Wemms are
considered by the Board to be independent. Gerald
Corbett was considered by the Board to be
independent on appointment. Biographies of the
members of the Nomination Committee are set out on
pages 24 and 25.
At the invitation of the Chairman of the Nomination
Committee, the Chief Executive Officer, Chief Financial
Officer and Human Resources Director may attend
meetings of the Nomination Committee. The Company
Secretary acts as secretary to the Nomination
Committee. The members of the Nomination Committee
can, where they judge it necessary to discharge their
responsibilities, obtain independent professional advice
at the Company’s expense.
Operation of the Nomination Committee
The Nomination Committee met on two occasions
during the year. Details of the attendance at Nomination
Committee meetings are set out in the Corporate
Governance Report on page 35.
The terms of reference of the Nomination Committee
are published on the Group’s website at
www.moneysupermarket.com and are available in hard
copy form on application to the Company Secretary.
its behalf by:
The Nomination Committee’s duties include:
• Evaluating the balance of skills, knowledge and
experience of the Board.
• Considering the size, structure and composition of
the Board.
• Where necessary, considering and recommending to
the Board persons who are appropriate for
appointment as Directors.
• Ensuring that succession planning for the Board is
in place.
The Nomination Committee has a formal, rigorous and
transparent procedure for the appointment of new
Directors to the Board. The process involves the
Nomination Committee interviewing suitable candidates
who are proposed by either existing Board members or
by an external search company. Careful consideration is
given to ensure appointees have enough time available
to devote to the role and that the balance of skills,
knowledge and experience on the Board is maintained.
When the Nomination Committee has identified a
suitable candidate, the Chairman of the Nomination
Committee will make a recommendation to the Board
with the Board making the final decision.
When dealing with the appointment of a successor to
the Chairman, the Senior Independent Non-Executive
Director will chair the Nomination Committee instead of
the Chairman.
During the year, the Nomination Committee reviewed
the balance of skills, knowledge and experience of the
Board together with the size, structure and composition
of the Board, and reviewed the succession plans for the
Board. The Nomination Committee has also continued
the process, with the assistance of an external search
40
Gerald Corbett
Chairman of the Nomination Committee
23 February 2010
Directors’ Remuneration Report
The principal objective of the remuneration policy is to
provide market competitive levels of remuneration in a
form and amount necessary to attract, retain and
motivate Executive Directors of appropriate calibre and
experience which is essential to the future success of
the Group. The importance of aligning the interests of
the Executive Directors with the creation of shareholder
value together with the incentivisation of performance
at the highest level is key to this objective. The
Remuneration Committee believes that this requires:
• The provision of mid-market base salaries with
appropriate leverage to reward sustained exceptional
performance provided stretching and demanding
performance conditions are met.
• A reward structure that balances short term and long
term performance.
• Competitive incentive arrangements that are
underpinned by a balance of financial and operational
performance metrics to provide both a focus on
business performance and alignment with the
interests of shareholders.
The Remuneration Committee met on five occasions
during the year. Details of the attendance at
41
General
In determining the remuneration arrangements of the
Executive Directors, the Remuneration Committee takes
into consideration the performance of the Executive
Directors and the pay and employment conditions
elsewhere in the Group.
• Determining and agreeing with the Board the
framework and policy for the remuneration of the
Chairman, Executive Directors, Company Secretary
and executive management team.
• Determining the remuneration package of the
Chairman, Executive Directors, Company Secretary
and executive management team, including, where
appropriate, bonuses, incentive payments and
pension arrangements within the terms of the agreed
framework and policy.
• Determining awards under the Company’s long term
incentive schemes.
Remuneration policy and objectives
The remuneration policy with respect to the Executive
Directors has been designed to provide market
competitive remuneration relative to a peer group of UK
listed companies of similar size and scope to the Group.
The Remuneration Committee’s duties include:
Advisors
During the year, the Remuneration Committee received
advice from MM&K Limited, who are independent
remuneration consultants, in connection with
remuneration matters including market comparison
salary benchmarking data and best practice, and the
development of the Group’s performance related
remuneration policy. MM&K Limited has no other
connection or relationship with the Group. MM&K
Limited provided no other services to the Group during
the financial year ended 31 December 2009.
At the invitation of the Chairman of the Remuneration
Committee, the Chief Executive Officer, Chief Financial
Officer and Human Resources Director may attend
meetings of the Remuneration Committee, except
when their own remuneration is under consideration.
No Director is involved in determining his or her own
remuneration. The Company Secretary acts as
secretary to the Remuneration Committee. The
members of the Remuneration Committee can,
where they judge it necessary to discharge their
responsibilities, obtain independent professional
advice at the Company’s expense.
The Remuneration Committee’s terms of reference are
published on the Group’s website at www.
moneysupermarket.com and are available in hard copy
form on application to the Company Secretary.
Management
Remuneration Committee
The Remuneration Committee comprises the three
Non-Executive Directors, Michael Wemms (Chairman of
the Remuneration Committee), Gerald Corbett and Rob
Rowley. Each of Michael Wemms and Rob Rowley are
considered by the Board to be independent. Gerald
Corbett was considered by the Board to be
independent on appointment. Biographies of the
members of the Remuneration Committee are set out
on pages 24 and 25.
Remuneration Committee meetings are set out in the
Corporate Governance Report on page 35.
Business Review
This report will be subject to an advisory shareholder
vote at the forthcoming Annual General Meeting. KPMG
Audit Plc have audited the content of the report
described as ‘Audited Information’ to the extent required
by law.
Business Overview
This Directors’ Remuneration Report has been prepared
by the Remuneration Committee and approved by the
Board for the financial year ended 31 December 2009. It
has been prepared in accordance with the Companies
Act 2006. This report provides the Company’s
statement of how it has applied the principles of good
governance relating to Directors’ remuneration and is
intended to communicate the Company’s policies and
practices on executive remuneration.
Directors’ Remuneration Report continued
The Remuneration Committee believes that the
remuneration of Executive Directors should provide
an appropriate balance between fixed and variable
(performance related) pay elements with a significant
proportion of potential total remuneration being
performance related elements. For target performance,
it is anticipated that approximately 60% of total
remuneration for Executive Directors will be
performance related in 2010.
The Remuneration Committee will continue to review
the remuneration policy to ensure it remains consistent
with best remuneration practice and is aligned to
shareholders’ interests. The Remuneration Committee
believes the policy described above, which applied
in 2009, remains appropriate and that it will continue
in 2010.
Components of remuneration
The main components of the remuneration packages of
the Executive Directors consist of the following
elements.
Base salary
Base salary for each Executive Director is determined by
the Remuneration Committee, taking account of the
Director’s performance, experience and responsibilities.
The Remuneration Committee considers salary levels
from a peer group of UK listed companies. This
approach ensures that the best available benchmark for
the Director’s specific position is obtained. When
determining Executive Director’s base salaries, the
Remuneration Committee also has regard to economic
factors, remuneration trends and the general level of
salary increases awarded throughout the Group.
The Remuneration Committee has decided that due to
the current economic climate there will be no base
salary increases for Executive Directors in January 2010
with the exception of David Osborne whose salary has
increased by £5,000 to £190,000 per annum reflecting
his contributions during the year.
Performance related bonus
Targets were approved by the Remuneration Committee
at the beginning of 2009 and were aligned to internal
targets and business objectives for 2009. Up to 125% of
base salary for the Chief Executive Officer and 100% of
base salary for each of the other Executive Directors
(excluding Simon Nixon) were payable for the
achievement of target adjusted EBITDA set at
appropriately stretching levels and certain business
objectives relating to, inter alia, employees, customers
and visitors on a 75% (target adjusted EBITDA)/25%
(business objectives) basis. For the achievement of
42
adjusted EBITDA performance greater than target, the
bonus amounts increased by 35% for each 10% increase
in adjusted EBITDA performance. No bonus was
payable unless an adjusted EBITDA threshold measure
was achieved.
In the financial year ended 31 December 2009, the Chief
Executive Officer earned a bonus of 90% of base salary
and each of the other Executive Directors (excluding
Simon Nixon) earned a bonus of 78% of base salary.
Simon Nixon did not participate in the Group’s
performance related bonus scheme in 2009. Details of
adjusted EBITDA achieved in 2009 are shown on page 14.
Following a review of incentive arrangements, the
Remuneration Committee has decided that the key
short term operational drivers of the business remain
appropriate and therefore the same overall structure as
applied in 2009 should continue in 2010. Up to 125% of
base salary for the Chief Executive Officer and 100% of
base salary for each of the other Executive Directors
(excluding Simon Nixon) will be payable for the
achievement of target adjusted EBITDA set at
appropriately stretching levels and certain business
objectives on a 70% (target adjusted EBITDA)/30%
(business objectives) basis in the case of Peter Plumb
and Paul Doughty and a 60% (target adjusted
EBITDA)/40% (business objectives) basis in the case of
Graham Donoghue and David Osborne. For the
achievement of adjusted EBITDA performance greater
than target, the bonus amounts will increase according
to a set formula up to a maximum of 175% of base salary
for the Chief Executive Officer and 150% of base salary
for each of the other Executive Directors (excluding
Simon Nixon) if exceptional performance targets are
met. No bonus is payable unless an adjusted EBITDA
threshold measure is achieved. Simon Nixon will not
participate in the Group’s performance related bonus
scheme in 2010.
Long Term Incentive Plan
Conditional nil cost share awards are made by Appleby
Trust (Jersey) Limited, as trustee of the Company’s
Employee Benefit Trust, following recommendations
made by the Board. The levels of award and the
performance conditions are recommended and
reviewed by the Remuneration Committee annually.
The awards normally vest at the end of the three year
performance period, subject to the achievement of the
performance conditions and continued employment.
Awards lapse to the extent that the performance
conditions are not achieved.
43
General
In order to enable option holders to participate in the
forthcoming special dividend proposed to be paid on
1 April 2010 and thereby prevent any reduction in the
value of options held by the option holders arising from
such special dividend, in February 2010, the
Remuneration Committee approved the early vesting of
all remaining options under this scheme. The
Remuneration Committee has determined that prior to
exercising any such options, the option holders are
required to enter into a restricted share agreement with
The Remuneration Committee chose the combination
of annually set adjusted EBITDA and TSR as the
performance targets for the 2009 award under the
Long Term Incentive Plan to provide closer alignment
Share Option Scheme
Prior to the listing of the Company on 31 July 2007
(‘Listing’), the Group operated the
Moneysupermarket.com Financial Group Limited Share
Option Scheme. All options under this scheme were
granted prior to Listing and the Group does not intend
to grant any further options under this scheme. The
options vest over a three year period from the date of
grant subject to continued employment and will lapse
on the earlier of the tenth anniversary of the date of
grant and the date the option holder ceases to be
employed by the Group. There are no performance
conditions applicable to this scheme as it is a historic
scheme used prior to Listing principally as a means of
retaining key employees.
No award will vest in relation to the TSR element for
performance below median, with 30% of the TSR
element of the award vesting at median, rising to 100%
at upper quartile on a straight-line basis. In order for the
TSR element to vest, the Remuneration Committee
must be satisfied that such vesting is justified when
taking into account the underlying financial
performance of the Company.
The Remuneration Committee has determined that the
performance targets for the 2010 award under the Long
Term Incentive Plan will be based on a combination of
comparative TSR and absolute TSR set at appropriately
stretching levels. The Remuneration Committee has
chosen this combination to ensure even closer
alignment of management with shareholders interests
and to incentivise management to generate long term
sustainable returns for shareholders.
For the TSR element of the award to vest in full, the
Company’s relative TSR must rank in the upper quartile
of a selected peer group of companies over the period
2009 to 2011 (inclusive).
Dividends will accrue on any shares that vest in the form
either of additional shares or a cash payment and will be
made at the time of vesting.
Management
The adjusted EBITDA target for each of the financial
years 2009 to 2011 (inclusive) represents one third of the
adjusted EBITDA element of the award. For the adjusted
EBITDA element of the award to vest in full, the adjusted
EBITDA performance conditions for each of the financial
years 2009 to 2011 (inclusive) must be achieved. The
adjusted EBITDA upper limit target together with the
adjusted EBITDA threshold for vesting and the formula
for determining vesting between the threshold and the
upper limit target for each of the financial years 2009 to
2011 (inclusive) is set annually by the Remuneration
Committee at the beginning of that financial year. No
award will vest in relation to the adjusted EBITDA
element for a financial year for performance below the
threshold level of vesting in respect of that financial
year. 30% of a financial year’s element of the adjusted
EBITDA award will vest at the threshold level of vesting
in respect of that financial year.
The Remuneration Committee will meet once the results
for the three year plan period are available to determine
whether, and the extent to which, the performance
conditions have been met.
Business Review
In 2009, awards under the Long Term Incentive Plan
were made to 46 employees of the Group and were
made over shares worth between 7% and 200% of those
employees’ annual base salaries. For the awards made in
2009, as detailed below, vesting of 70% of the award Is
subject to an adjusted EBITDA performance condition
and vesting of the remaining 30% of the award is
subject to a total shareholder return (TSR) performance
condition. Both of these performance conditions are
assessed over a three year performance period as
detailed below.
with underlying Group performance and shareholder
interests and to act as a strong retention tool for senior
management. The Remuneration Committee further
chose annually set adjusted EBITDA targets to ensure
that the adjusted EBITDA target would remain relevant
and stretching over the entire three years of the plan
during a period when the Remuneration Committee had
extremely limited visibility of potential future adjusted
EBITDA of the Group as a result of the unprecedented
global financial crisis prevailing at that time.
Business Overview
The maximum award that can be made to an employee
in any financial year is the equivalent of 200% of an
employee’s annual base salary, calculated on the basis
of the market price of the Company’s shares at the date
of grant.
the Company. As a result, until the third anniversary of
the date of grant, any shares obtained following such
exercise will be subject to clawback and any shares that
would not have vested under the rules of the scheme
will be forfeited for no consideration.
A resolution will be proposed at the forthcoming Annual
General Meeting to authorise the payment of a sum to
option holders representing the reduction in the value of
options held by them following the payment of the
special dividend of 4.93p per ordinary share on 16
October 2009. Further detail on this resolution is
provided in the notice of Annual General Meeting sent
to shareholders at the same time as this report.
Pension
The Company operates a contributory money purchase
pension scheme for the benefit of the Executive
Directors. In all cases, base salary only is pensionable.
During the year, the Company matched pension
contributions up to 8% of base salary for the benefit of
the Executive Directors. From February 2010 the
Company will match pension contributions up to 10% of
base salary for the benefit of the Executive Directors.
The Remuneration Committee increased the matched
pension contributions limit to bring the scheme more
into line with market standards.
Car allowance
The Company provides a car allowance of £14,000 per
annum for each of the Executive Directors. The amount
of the car allowance is reviewed annually.
Share Incentive Plan
The Company’s HMRC approved all employee Share
Incentive Plan provides all employees with the
opportunity to purchase ordinary shares in the
Company on a monthly basis using money deducted
from their pre-tax salary.
Simon Nixon Scheme
As disclosed in the prospectus issued in connection with
the Listing of the Company, Simon Nixon established in
2009 an additional incentive scheme under which he
personally granted options over 1,413,199 ordinary
shares held by him in favour of Paul Doughty. The
options vested in 2009 subject to Paul Doughty’s
continued employment with the Group and the
satisfaction of Group related performance targets and
individual related performance targets for the financial
year ended 31 December 2008 and for the first six
months of 2009. On 4 August 2009, Paul Doughty
exercised options over 1,120,813 ordinary shares held by
44
Simon Nixon and the remaining 292,386 options lapsed
as a result of a failure of the Group to meet the
performance targets for 2008.
The purpose of this scheme was to further incentivise
the achievement by Paul Doughty of exceptional
performance and to align his interests with the interests
of shareholders. Simon Nixon does not intend to grant
any further options under this scheme.
Chairman’s Share Award
Under a share award agreement between the Company
and Gerald Corbett dated 31 July 2007 (‘Share Award’),
Gerald Corbett is entitled to subscribe at nominal value
for 235,294 ordinary shares in the Company
(representing twice the number of shares he purchased
on Listing with an investment of £200,000), conditional
upon completion of three years’ service as Chairman of
the Company from Listing and the continued retention
for that three year period of the 117,647 ordinary shares
he purchased on Listing. Shareholder approval was
obtained prior to the entry by the Company into the
Share Award.
Following the payment of the special dividend of 4.93p
per ordinary share on 16 October 2009, the Remuneration
Committee approved an adjustment to the Share Award
in accordance with the rules of the Share Award. As a
result of that adjustment, Gerald Corbett has become
entitled to subscribe at nominal value for an additional
13,318 ordinary shares in the Company representing the
reduction in the value of the Share Award arising from the
payment of that special dividend.
In order to enable the Chairman to participate in the
forthcoming special dividend proposed to be paid on
1 April 2010 and thereby prevent any reduction in the
value of the Share Award arising from such special
dividend, in February 2010, the Remuneration
Committee approved, in accordance with the rules of
the Share Award, the early subscription by the Chairman
of the shares comprising the Share Award. The
Remuneration Committee has determined that prior to
such subscription, the Chairman is required to enter into
a restricted share agreement with the Company. As a
result, until the third anniversary of the Share Award, any
shares obtained by the Chairman following such
subscription will be subject to clawback and any shares
that would not have been eligible for subscription under
the rules of the Share Award will be forfeited for
no consideration.
Business Overview
Service agreements
The current policy is for Executive Directors’ service agreement notice periods to be normally no longer than 12
months. The service agreements of the current Executive Directors and the letters of appointment of the NonExecutive Directors include the following terms:
Effective date
of service
agreement/ letter of
appointment
Notice
period from
Director
(months)
Notice
period from
Company
(months)
Executive Directors
Simon Nixon
25 February 2009
12
Peter Plumb
25 February 2009
12
Paul Doughty
31 July 2007
12
Graham Donoghue
23 February 2009
12
David Osborne
23 February 2009
12
12
12
12
12
12
12
12
12
12
12
Gerald Corbett
28 June 2007
6
12
Michael Wemms
10 July 2007
7
12
Rob Rowley
19 September 2007
9
0
12
12
12
Management
Unexpired
term
(approximate
months from
31 December 2009)1
Business Review
1. Executive Directors are appointed on 12 month rolling contracts.
The service agreements and letters of appointment are available for inspection by shareholders at the forthcoming
Annual General Meeting and during normal business hours at the Company’s registered office address.
The Non-Executive Directors do not have service agreements but instead have letters of appointment for a three
year term. The current policy is for Non-Executive Directors’ letters of appointment notice periods to be normally
no longer than 12 months. Each of the Non-Executive Directors currently has a letter of appointment reflecting this.
45
General
Save in respect of the Chairman’s Share Award (details of which are set out on page 44), remuneration of
Non-Executive Directors consists solely of fees. The remuneration of the Chairman is determined by the
Remuneration Committee and the remuneration of the other Non-Executive Directors is determined by the
Executive Directors. The Non-Executive Directors do not participate in any of the Group’s bonus, pension, share
option or other performance related incentive schemes. In line with the approach for Executive Directors, there will
be no increases in the Non-Executive Directors’ fees in January 2010.
Other appointments
Executive Directors may only accept outside appointments on external boards or committees with the prior
approval of the Board. In addition to his directorship of companies in the Group, Simon Nixon is a director of
Simonseeks.com Limited in which Simon Nixon is, directly or indirectly, the majority shareholder. In addition to his
directorship of companies in the Group, Peter Plumb is a director of The Naked Fruit Company Limited.
Subject to the above, there are no special provisions for Executive Directors or Non-Executive Directors with regard
to compensation in the event of loss of office. In the event of the employment of an Executive Director being
terminated, the Remuneration Committee would, having regard to the individual’s circumstances, pay due regard to
best practice and take account of the individual’s duty to mitigate their loss.
Peter Plumb’s service agreement contains a temporary provision which states that, if his employment is terminated
by the Company as a result of a change in control, wrongful dismissal or redundancy before 1 November 2011, he
will be entitled to the sum of £225,000 less the market value of any shares received or receivable by him pursuant
to his participation in the Group’s Long Term Incentive Plan and less any tax payable on such sum, in addition to his
12 month notice period. Thereafter, Peter Plumb’s notice period will revert to the normal 12 months which reflects
the Company’s general policy on such matters.
Performance graph
The following graph shows the total shareholder return of the Company in comparison to an appropriate index for
the period since Listing.
Total shareholder return: Moneysupermarket.com Group PLC and FTSE 250 Index (excluding Investment Trusts)
Value of a hypothetical £100 holding since Listing
120
100
80
60
FTSE 250 Index
(excluding Investment Trusts)
40
20
Jul 07
Dec 07
Jun 08
Dec 08
Jun 09
Dec 09
The Remuneration Committee considers the FTSE 250 Index (excluding Investment Trusts) to be an appropriate
index for total shareholder return and comparison disclosure as it represents a broad equity market index in which
the Company is a constituent member.
Directors’ interests in shares
The beneficial interests of the Directors and their connected persons in the shares of the Company are shown
below:
Ordinary
31 December 2009
Ordinary
31 December 2008
Executive Directors
Simon Nixon
Peter Plumb
Paul Doughty
Graham Donoghue
David Osborne
267,257,021
–
2,317,346
–
–
270,050,932
–
699,539
–
–
Gerald Corbett
Michael Wemms
Rob Rowley
117,647
6,125
–
117,647
5,500
–
The Directors’ shareholdings shown on the previous page are all beneficial interests and include the interests of
their spouses, civil partners and infant children or step-children together with the interests in shares held on behalf
of the Executive Directors by the trustee of the Company’s Share Incentive Plan which is detailed on page 44. No
Director held a non-beneficial interest in any shares.
In the period 31 December 2009 to the date of this report, there has been no change in the Directors’ interests in
shares in the Company other than through the monthly purchases in January and February 2010 of ordinary shares
under the Company’s Share Incentive Plan by Paul Doughty. This has resulted in an increase in the interests held by
Paul Doughty of 329 ordinary shares during this period.
The Remuneration Committee’s intention is to introduce a policy under which the Executive Directors will be
required to build up a meaningful shareholding in the Company.
Audited information
The following information has been audited by the Company’s auditors, as required by the Companies Act 2006.
46
Business Overview
Directors’ remuneration
Details of individual Directors’ remuneration received during the year are as follows:
Total
1,383
98
802
70
2,353
463
–
323
–
–
215
75
60
1,136
Directors’ interests in Share Options
Full details of the options over ordinary shares in the Company held by the Executive Directors under the Share
Option Scheme during the year are shown below:
Market price
Options Options held at granted start of during year
year Options exercised during year Options lapsed during year Options Option of shares Date
held at exercise at date from which
end of price of exercise option year
(p) (p) exercisable1 Expiry
date
Paul Doughty 18 June 2007 2,500,000
– 1,250,000
– 1,250,000
6
49.85 18 June 18 June
2008
2017
Total 2,500,000
– 1,250,000
– 1,250,000
1. The options granted to Paul Doughty on 18 June 2007 vest in three equal tranches after the first, second and third anniversary of the date of
grant. In February 2010 the Remuneration Committee approved the early vesting and exercise of the remaining options held by Paul Doughty.
Further information is provided on pages 43 and 44.
2. Aggregate gains made by Paul Doughty on the exercise of options over 1,250,000 ordinary shares in the year were £548,125.
Date of grant
1. Gerald Corbett receives a basic annual fee of £190,000. Michael Wemms and Rob Rowley each receive a basic annual fee of £50,000. An
additional fee of £15,000 per annum is paid to Michael Wemms as the Senior Independent Non-Executive Director and an additional fee of
£10,000 per annum is paid to each of Rob Rowley and Michael Wemms as the Chairmen of the Audit and Remuneration Committees
respectively. The basic annual salaries of the Executive Directors in 2010 are as follows: Simon Nixon (£100,000), Peter Plumb (£350,000), Paul
Doughty (£250,000), Graham Donoghue (£220,000) and David Osborne (£190,000). The figures for Graham Donoghue and David Osborne
relate to the period from their appointment as Directors on 23 February 2009 to 31 December 2009.
2. Benefits for the Executive Directors incorporate all benefits and expense allowances arising from employment which principally relate to the
provision of a car allowance. Benefits for Gerald Corbett relate to an annual allowance of £25,000 for a motor vehicle and associated costs.
3. Includes performance related bonuses earned in the period under review but paid following the end of the financial year.
Management
Executive Directors
Simon Nixon
142
2
–
–
144
Peter Plumb
329
17
315
25
686
Paul Doughty
250
14
196
18
478
Graham Donoghue
183
12
170
15
380
David Osborne
154
28
121
12
315
Gerald Corbett
190
25
–
–
215
Michael Wemms
75
–
–
–
75
Rob Rowley
60
–
–
–
60
Total
2008
£000
Business Review
Performance
Basic salary/
Taxable
related
Pension
Total
fees
benefits
bonus contributions
2009
£0002
£0003
£000
£000
£0001
General
47
Directors’ interests in the Long Term Incentive Plan
Full details of the conditional awards made to the Executive Directors under the Long Term Incentive Plan during
the year are shown below:
Market price
Awards Awards Awards of shares At start of
made vested lapsed at date Date year/date of during during during At end of of award of award appointment year year year year
(p) 8 April 2009
– 1,145,288
–
– 1,145,288
Total
Peter Plumb
– 1,145,288
–
– 1,145,288
Paul Doughty
8 April 2009
– 1,308,901
–
– 1,308,901
Total
– 1,308,901
–
– 1,308,901
Graham Donoghue
8 April 2009
–
863,874
–
–
863,874
Total
–
863,874
–
–
863,874
–
484,293
–
–
484,293
– 484,293
–
– 484,293
David Osborne
8 April 2009
Total
Vesting
date
53.5 8 April 2012
53.5 8 April 2012
53.5 8 April 2012
53.5 8 April 2012
1. The performance conditions attaching to the award are adjusted EBITDA and total shareholder return. Further information is provided on
pages 42 and 43.
2. Conditional awards under the Long Term Incentive Plan are made at nil cost. The exercise price is nil.
In the period from 1 January 2009 to 31 December 2009, the highest mid-market price of the Company’s share was
90p and the lowest mid-market price was 34p, and at 31 December 2009 it was 74p.
This report was approved by the Board and signed on its behalf by:
Michael Wemms
Chairman of the Remuneration Committee
23 February 2010
48
John Costello (Senior Statutory Auditor)
For and on behalf of KPMG Audit Plc, Statutory Auditor
Chartered Accountants
St James’ Square
Manchester
M2 6DS
23 February 2010
General
Opinion on Financial Statements
In our opinion:
• the Financial Statements give a true and fair view of
the state of the Group’s and of the Company’s affairs
as at 31 December 2009 and of the Group’s profit for
the year then ended;
• the Group Financial Statements have been properly
prepared in accordance with IFRSs as adopted by the
EU;
• the Company Financial Statements have been
properly prepared in accordance with UK Generally
Accepted Accounting Practice;
• the Financial Statements have been prepared in
accordance with the requirements of the Companies
Act 2006; and, as regards the Group Financial
Statements, Article 4 of the IAS Regulation.
Under the Listing Rules we are required to review:
• the Directors’ statement, set out on page 30,
in relation to going concern; and
• the part of the Corporate Governance Report in the
Directors’ Report relating to the Company’s
compliance with the nine provisions of the June 2008
Combined Code specified for our review.
Scope of the audit of the Financial Statements
A description of the scope of an audit of Financial
Statements is provided on the APB’s website at
www.frc.org.uk/apb/scope/UKP.
Under the Companies Act 2006 we are required to
report to you if, in our opinion:
• adequate accounting records have not been kept by
the Company, or returns adequate for our audit have
not been received from branches not visited by us; or
• the Company Financial Statements and the part of
the Directors’ Remuneration Report to be audited are
not in agreement with the accounting records and
returns; or
• certain disclosures of Directors’ remuneration
specified by law are not made; or
• we have not received all the information and
explanations we require for our audit.
Respective responsibilities of Directors and auditors
As explained more fully in the Directors’ Responsibilities
Statement set out on page 31, the Directors are
responsible for the preparation of the Financial
Statements and for being satisfied that they give a true
and fair view. Our responsibility is to audit the Financial
Statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland).
Those standards require us to comply with the Auditing
Practices Board’s (APB’s) Ethical Standards for Auditors.
Matters on which we are required to report by
exception
We have nothing to report in respect of the following:
Management
This report is made solely to the Company’s members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company’s
members those matters we are required to state to
them in an auditors’ report and for no other purpose. To
the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the
Company and the Company’s members, as a body, for
our audit work, for this report, or for the opinions we
have formed.
Opinion on other matters prescribed by the
Companies Act 2006
In our opinion:
• the part of the Directors’ Remuneration Report to be
audited has been properly prepared in accordance
with the Companies Act 2006; and
• the information given in the Directors’ Report for the
financial year for which the Financial Statements are
prepared is consistent with the Financial Statements.
Business Review
We have audited the Group and Company Financial
Statements (the ‘Financial Statements’) of
Moneysupermarket.com Group PLC (the ‘Company’) for
the year ended 31 December 2009 set out on pages 50
to 77. The financial reporting framework that has been
applied in the preparation of the Group Financial
Statements is applicable law and International Financial
Reporting Standards (‘IFRSs’) as adopted by the EU.
The financial reporting framework that has been applied
in the preparation of the Company Financial Statements
is applicable law and UK Accounting Standards (UK
Generally Accepted Accounting Practice).
Business Overview
Independent Auditor’s Report to the Members of
49
Consolidated Statement of Comprehensive Income
Year ended Year ended
31 December 31 December
2009 2008
Note
£000
£000
Revenue
Cost of sales
136,874 178,800
(42,627) (62,063)
Gross profit
94,247
116,737
Distribution expenses
(18,446)
(21,618)
11
(73,495) (79,635)
– (70,000)
Administrative expenses
(73,495) (149,635)
Administrative expenses – other
Administrative expenses – impairment of goodwill
Results from operating activities
Finance income
2,306
877
(54,516)
3,504
Profit/(loss) before income tax
Income tax charge
7
3,183
(1,267)
(51,012)
(8,094)
Profit/(loss) for the year
1,916
(59,106)
4
6
Other comprehensive income:
Foreign currency translation
Deferred tax on share-based payments
Other comprehensive income for the year
(121)
(49)
(170)
(6)
(209)
(215)
Total comprehensive income for the year
1,746
Profit/(loss) attributable to:
Equity holders of the Company
Minority interest
20
2,068 (58,987)
(152)
(119)
Total comprehensive income attributable to:
Equity holders of the Company
Minority interest
20
Total comprehensive income for the year
(59,321)
1,916
(59,106)
1,907
(161)
(59,201)
(120)
1,746
(59,321)
Earnings/(loss) per share:
Basic earnings/(loss) per ordinary share (p)
8
0.4
(11.8)
0.4
(11.8)
Diluted earnings/(loss) per ordinary share (p)
50
8
Consolidated Statement of Financial Position
2009 2008
Note
£000
£000
13,596
223,653
362
Total non-current assets
210,588
237,611
Current assets
Trade and other receivables
12
Prepayments
Cash and cash equivalents
16
14,375
1,793
53,805
16,074
2,059
73,465
Total current assets
69,973
91,598
Total assets
280,561
329,209
14
39,011
47,259
Current liabilities
Trade and other payables
13
Current tax liabilities
18,756
2,126
20,710
3,394
Total current liabilities
20,882
24,104
Total liabilities
59,893
71,363
Liabilities
Non-current liabilities
Deferred tax liability
Equity
Share capital
15
Share premium
Retained earnings
Other reserves
102
101
171,207
171,047
(45,920) (20,042)
95,279 106,740
Total equity
220,668
Total equity and liabilities
280,561
257,846
–
257,846
329,209
The Financial Statements were approved by the Board of Directors and authorised for issue on 23 February 2010.
They were signed on its behalf by:
Total equity attributable to equity holders of the Company 220,668
Minority interest
–
12,135
198,453
–
Management
10
11
14
Business Review
Assets
Non-current assets
Property, plant and equipment
Intangible assets
Deferred tax asset
Business Overview
at 31 December 2009
Peter Plumb
General
Paul Doughty
51
Consolidated Statement of Changes in Equity
Issued
Reserve
share
Share
Other
Retained
for own
capital
premium
reserves
earnings
shares
Note
£000
£000
£000
£000
£000
Foreign
currency
translation
reserve
£000
Total
£000
At 1 January 2008
118
170,565
143,018
13,285
–
Foreign currency translation1
Deferred tax recognised on
share based payments1
Loss for the year
–
–
–
–
–
(6)
–
–
–
–
–
–
(209)
(59,106)
–
–
–
–
(209)
(59,106)
–
2
–
482
–
–
(59,315)
–
–
–
(6)
–
(59,321)
484
19
–
–
(36,300)
–
(14,637)
4,325
36,300
–
–
–
–
–
–
–
–
–
(14,637)
4,325
–
(20,042)
–
3
–
(121)
Total income and expense
for the year
Share options exercised
Purchase and cancellation
of deferred shares
Equity dividends
9
Share-based payment
17
Reserves transfer
(19)
–
–
–
At 31 December 2008
101
171,047
106,737
Foreign currency translation1
Deferred tax recognised on
share based payments1
Profit for the year
–
–
–
–
–
–
–
–
–
Total income and expense
for the year
Share options exercised
Equity dividends
9
Share based payment
17
Reserves transfer
–
1
–
–
–
–
160
–
–
–
At 31 December 2009
102
171,207
–
–
–
–
–
9 326,995
(6)
257,846
(49)
1,916
–
–
–
1,867
–
–
– (42,730)
–
3,645
(11,340)
11,340
–
–
–
–
–
(121)
1,746
–
161
– (42,730)
–
3,645
–
–
95,397
–
(118) 220,668
(45,920)
–
–
(121)
(49)
1,916
1. Foreign currency translation and deferred tax recognised on share based payments represent the only income or expense for the current and
prior years recognised directly in equity.
Other reserves
The other reserves balance represents the merger and revaluation reserves generated upon the acquisition of
Moneysupermarket.com Financial Group Limited by the Company, as discussed below, and a capital redemption
reserve for £19,000 arising from the acquisition of 95,294,118 deferred shares of 0.02p by the Company from
Simon Nixon.
Upon the acquisition of Moneysupermarket.com Financial Group Limited, a merger reserve of £60,750,000 for 15%
of the fair value of assets acquired, a merger reserve of £16,923,000 for 45% of the book value transferred from a
company under common control, and a revaluation reserve of £65,345,000 representing 45% of the fair value of
the intangible assets transferred from a company under common control, were recognised. Amounts are
transferred from these reserves to retained earnings as the goodwill and other intangibles balances are impaired
and amortised.
Foreign currency translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial
statements of foreign operations.
Reserve for own shares
The reserve for the Company’s own ordinary shares comprises the cost of the Company’s ordinary shares held by
the Group. At 31 December 2009, the Group held 698,011 ordinary shares at a cost of 0.02p per share through a
trust for the benefit of the Group’s employees.
52
Consolidated Statement of Cash Flows
Year ended Year ended
2009 2008
Note
£000
£000
24,970
34,655
Net cash flow from investing activities
(2,062)
(1,037)
Financing activities
Proceeds from share issue
Dividends paid
9
161
(42,730)
484
(14,637)
Net cash flow from financing activities
(42,569)
(14,153)
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at start of year
Effect of exchange rate fluctuations on cash held
(19,661)
73,465
1
19,465
54,015
(15)
Cash and cash equivalents at end of year
53,805
73,465
16
–
3,581
(4,618)
Investing activities
Acquisition of minority interest in icero GmbH
(2)
Interest received
922
Acquisition of property, plant and equipment
10
(2,982)
Management
Net cash flow from operating activities
Business Review
Operating activities
1,916
(59,106)
Adjustments to reconcile Group net profit/(loss) to net cash flows:
Depreciation
10
4,436
3,543
11
25,200
25,200
11
– 70,000
Loss on disposal of property, plant and equipment
–
78
Net finance income
6
(877) (3,504)
Equity-settled share-based payment transactions
17
3,645
4,325
Effects of foreign exchange differences
(116)
–
Income tax charge
7
1,267
8,094
Change in trade and other receivables
1,920
2,890
Change in trade and other payables
(1,954)
(4,971)
Income tax paid (10,467) (11,894)
Business Overview
General
53
Notes to the Consolidated Financial Statements
1 Corporate information
The Consolidated Financial Statements of Moneysupermarket.com Group PLC (‘Company’), a company
incorporated in England, and its subsidiaries for the year ended 31 December 2009 were authorised for issue in
accordance with a resolution of the Directors on 23 February 2010. The Consolidated Financial Statements have
been prepared and approved by the Directors in accordance with International Financial Reporting Standards as
adopted by the EU (‘Adopted IFRSs’). The Company has elected to prepare its Company Financial Statements in
accordance with UK GAAP; these are presented on pages 73 to 77.
2 Summary of significant accounting policies
The Financial Statements are prepared on the historical cost basis. Comparative figures presented in the Financial
Statements represent the year ended 31 December 2008. The Financial Statements are prepared on a going
concern basis, which the Directors deem appropriate, given the Group’s positive cash position and lack of debt.
Use of estimates and judgements
The preparation of Financial Statements requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in any future periods affected.
The most significant areas of estimation uncertainty, and areas where critical judgements are made in applying
accounting policies that have a material effect on the Financial Statements, are listed below. The uncertainties
encountered, and judgements made, are described in more detail in the relevant accounting policies and
accompanying notes:
•
•
•
•
•
Note 11
Note 12 Note 12
Note 13
Note 17
goodwill and other intangibles, including their amortisation and impairment
revenue recognition
provision for doubtful debts
accruals
share-based payments
Basis of consolidation
These Consolidated Financial Statements incorporate the Financial Statements of the Company and its subsidiaries.
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly,
to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing
control, potential voting rights that are currently exercisable or convertible are taken into account. The Financial
Statements of subsidiaries are included in the Consolidated Financial Statements from the date that control
commences until the date that control ceases.
The Group was established via a series of transactions that occurred concurrently on 22 June 2007. These
comprised the incorporation of the Company with Simon Nixon as sole shareholder, the acquisition by the
Company using a share for share exchange of Simon Nixon’s 45% interest in Moneysupermarket.com Financial
Group Limited and the acquisition by the Company of all other shares in Moneysupermarket.com Financial Group
Limited from third parties. The acquisition of Simon Nixon’s shares was between two parties, being Simon Nixon
and the Company, who were under common control at the time of the transaction. The acquisition was of an
interest in a company which gave the investor a significant influence in the company and it was concluded that this
arrangement was a common control transaction and not within the scope of IFRS 3 Business Combinations. As a
result the Company accounted for this 45% interest in Moneysupermarket.com Financial Group Limited at original
carrying value rather than fair value at the date of the acquisition. The acquisition of the remaining shares in
Moneysupermarket.com Financial Group Limited was accounted for in accordance with IFRS 3 Business
Combinations applying the accounting guidance for a business combination achieved in stages. This resulted in the
fair value of the identifiable assets, liabilities and contingent liabilities of Moneysupermarket.com Financial Group
Limited being recognised in full and the goodwill in respect of the acquisition from third parties being recognised.
54
Management
Revenue
Internet business
The Group generates fees from internet lead generation (click based revenue), commissions from brokerage sales
and advertising through a variety of contractual arrangements. The Group recognises click based revenues and
associated costs in the period that the lead is generated. Brokerage commissions are recognised at the point of
completion of the transaction with the customer. Advertising revenue is recognised in the period when an
advertisement is delivered to the end user.
Business Review
Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the
functional currency at the exchange rate at that date. Foreign currency differences arising on retranslation are
recognised as a profit or loss.
Business Overview
2 Summary of significant accounting policies continued
Foreign currency
The Consolidated Financial Statements are presented in sterling, which is the Company’s functional and
presentation currency. The functional currency of the foreign operation icero GmbH is the euro. The income and
expenses of the foreign operation are translated into sterling at an average exchange rate for the period in which
the activity occurred. The assets and liabilities of the foreign operation are translated into sterling using exchange
rates ruling as at the balance sheet date. The exchange difference arising upon translation is taken directly to a
separate component of equity.
Intermediary business
Commissions are recognised on completed transactions in the period that a transaction completes.
Revenue is recognised net of value added tax.
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items of property, plant and equipment.
Depreciation is charged to the Statement of Comprehensive Income on a straight-line basis over the estimated
useful life of each part of an item of property, plant and equipment. Land is not depreciated. Assets under
construction are not depreciated until brought into use. The estimated useful lives are as follows:
Buildings
50 years
Plant and equipment (including IT equipment) 3 years
Fixtures and fittings 5 years
Office equipment 5 years
The useful lives and depreciation rates are reassessed at each reporting date.
Intangible assets
Goodwill
Business combinations are accounted for using the acquisition accounting method. The excess of the cost of the
business combination over the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities
and contingent liabilities, is recognised in the balance sheet as goodwill and is not amortised.
55
General
After initial recognition, goodwill is measured at cost less any accumulated impairment losses, with the carrying
value being reviewed for impairment at least annually, and whenever there is an indication that the carrying value
may be impaired.
Notes to the Consolidated Financial Statements continued
Other intangible assets
The cost of other intangible assets acquired in a business combination is fair value as at the date of acquisition.
After initial recognition, intangible assets are carried at cost less any accumulated amortisation and any
accumulated impairment losses. All the Group’s intangible assets (other than goodwill) have been identified as
having finite useful lives. As such, they are amortised on a straight line basis over their useful economic life and
assessed for impairment whenever there is an indication that the intangible asset may be impaired. The
amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at least
at each financial year end. The amortisation expense on intangible assets with finite lives is recognised in the
Statement of Comprehensive Income in the expense category consistent with the function of the intangible asset.
The estimated useful lives are as follows:
Market-related
10 years
Customer relationships 7 years
Customer lists 3 years
Technology 3 years
Market-related intangible assets are defined as those that are primarily used in the marketing or promotion of
products and services, for example trademarks, trade names and internet domain names.
Customer-related intangible assets consist of customer lists, customer contracts and relationships, and noncontractual customer relationships. For accounting purposes, customer relationships and customer lists have been
identified separately. Relationships with high-profile customers provide the Group with prominence in the
marketplace, create volume and traffic on the website, and enhance the reputation of the brand. Customer lists
allow the Group to undertake targeted marketing activities.
Technology-based intangible assets relate to innovations and technical advances such as computer software,
patented and unpatented technology, databases and trade secrets.
Impairment
The carrying amounts of the Group’s assets are reviewed annually to determine whether there is any indication of
impairment. If such indication exists, the asset’s recoverable amount is estimated.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its
recoverable amount. Impairment losses are recognised in the Statement of Comprehensive Income.
For the purposes of impairment reviews, the recoverable amount of the Group’s assets is taken to be the higher of
their fair value less costs to sell and their value in use.
Research and development
Expenditure on research activities, undertaken with the prospect of gaining technical knowledge and
understanding, is charged to the Statement of Comprehensive Income when incurred. Development expenditure is
capitalised when it meets the criteria outlined in SIC 32. Expenditure that does not meet the criteria is expensed
directly to the Statement of Comprehensive Income.
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on
demand are included as a component of cash and cash equivalents for the purpose only of the Statement of
Cash Flows.
Employee benefits
Defined contribution plans
Obligations for contributions to defined contribution pension plans are recognised as an expense in the Statement
of Comprehensive Income as incurred.
56
Advertising costs
The Group incurs costs from advertising via a number of different media. Costs associated with the production of
adverts are recognised as an expense in the Statement of Comprehensive Income only once the advert is delivered
to the Group in a format ready for use, having been approved for airing or displaying. The cost of airing or
displaying the advert is taken as an expense in the period in which the advert is aired or displayed.
Net finance income
Net finance income comprises interest payable and interest receivable, which are recognised in the Statement of
Comprehensive Income as they accrue using the effective interest method.
Dividends
Dividends payable to the Company’s shareholders are recognised as a liability and deducted from shareholders’
equity in the period in which the shareholders’ right to receive payment is established.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available
against which the asset can be utilised.
57
General
A deferred tax liability was recognised in the prior year as 28% of the value of the intangible assets with finite lives
which were generated upon the acquisition of Moneysupermarket.com Financial Group Limited, representing the
tax effect of the amortisation of these assets in future periods. At the prior year end, this liability was remeasured at
the enacted corporation tax rate of 28%, this being the rate at which the liability will unwind. This liability will
decrease in line with the amortisation of the related intangible assets, with the deferred tax credit recognised in the
Statement of Comprehensive Income in accordance with IAS 12.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are
not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither
accounting nor taxable profit other than in a business combination; and differences relating to investments in
subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax
provided is based on the expected manner of realisation or settlement of the carrying amount of assets and
liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the Statement of
Comprehensive Income except to the extent that it relates to items recognised directly in equity, in which case it is
recognised in equity.
Management
A provision is recognised for the amount expected to be paid under short term cash bonus or profit sharing plans if
the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by
the employee and the obligation can be estimated reliably.
Business Review
Short term employee benefits
Short term employee benefit obligations are measured on an undiscounted basis and are recognised in the
Statement of Comprehensive Income as the related service is provided.
Business Overview
Share-based payment transactions
The Group’s share schemes allow certain Group employees to acquire ordinary shares in the Company. The fair
value of share awards made is recognised as an employee expense with a corresponding increase in equity. The fair
value is measured at award date and spread over the period during which the employees become unconditionally
entitled to the awards. The fair value of the share awards made is measured using the Black-Scholes model, taking
into account the terms and conditions upon which the awards were made. The amount recognised as an expense is
adjusted to reflect the number of share awards expected to vest.
Group management of capital
The Group’s objectives when managing capital are:
•
•
to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders; and
to provide an adequate return to shareholders by pricing products and services commensurately with the level
of risk.
The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes
adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.
In assessing the level of capital all components of equity are taken into account, i.e. share capital, retained earnings
and reserves (where applicable).
The Group manages its cash balances by depositing them with a number of financial institutions to reduce credit
risk. The Group had no debt as at 31 December 2009 and is not subject to externally imposed capital requirements;
management of capital therefore focuses around its ability to generate cash from its operations. In order to
maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares, or sell assets to raise funds. The Group believes it is meeting its objectives
for managing capital as funds are available for reinvestment where necessary as well as being in a position to make
returns to shareholders where this is felt appropriate.
Accounting standards issued but not yet effective
A number of new standards, amendments to standards and interpretations have been issued during the year ended
31 December 2009 but are not yet effective, and therefore have not yet been adopted by the Group:
IAS 27 (Amended 2008) Consolidated and Separate Financial Statements – is effective for reporting periods
beginning on or after 1 July 2009 and applies prospectively. The standard deals with changes to the accounting for
non-controlling (minority) interest and deals primarily with the accounting for changes in ownership interests in
subsidiaries after control is obtained, the accounting for the loss of control of subsidiaries, and the allocation of
profit or loss to controlling and non-controlling interests in a subsidiary.
IFRS 3 Business Combinations (Revised 2008) – is effective for reporting periods beginning on or after 1 July 2009
and applies prospectively. Key changes are that transaction costs are expensed other than debt/equity income
costs (previously all costs were capitalised), goodwill is fixed at the date of acquisition, subsequent adjustments go
through the income statement, contingent payments which require future services (such as an earn out) that are
forfeited if employment ceases are treated, in full, as post acquisition remuneration.
The Group continues to monitor the potential impact of other new standards and interpretations which may be
endorsed by the European Union and require adoption by the Group in future reporting periods.
58
Insurance
£000
Travel
£000
Home
£000
Other
£000
Total
£000
38,132
75,669
16,305
5,539
1,229
136,874
Results
Operating expenses (134,568)
2,306
877
Profit before tax
Income tax charge
3,183
(1,267)
Profit for the year
1,916
At 31 December 2009
Assets and liabilities
Intangible assets
Goodwill
Other unallocated assets
143,488
54,965
82,108
39,011
20,882
Total liabilities
59,893
Other segment information
Capital expenditure
Intangible fixed assets
2,982
–
Total capital expenditure
2,982
Depreciation
Amortisation
4,436
25,200
280,561
Total assets
Other unallocated liabilities
Profit from operating activities
Net finance income
Management
Year ended 31 December 2009
Revenue
Segment revenue
Money
£000
Business Review
Business Overview
3 Segmental information
Business segments
In adopting IFRS 8 – Operating Segments for the first time, the Group has disclosed four reportable segments,
being Money, Insurance, Travel and Home. This disclosure correlates with the information which is presented to
the Group’s Chief Operating Decision Maker, the Company Board, which reviews revenue by segment. The Group’s
costs, finance income, tax charges and net assets are only reviewed by the Chief Operating Decision Maker at a
consolidated level, and therefore have not been allocated between segments in the analysis below. Previously,
under IAS 14, the Group reported Internet and Intermediary segments. Of the Group revenue of £136.9m
(2008: £178.8m) reported in 2009, £134.9m (2008: £176.3m) was generated in the UK.
General
59
3 Segmental information continued
Year ended 31 December 2008
Revenue
Segment revenue
Money
£000
Insurance
£000
Travel
£000
Home
£000
Other
£000
Total
£000
68,265
77,739
19,089
7,416
6,291
178,800
Results
Operating expenses
(233,316)
Loss from operating activities
Net finance income
(54,516)
3,504
Loss before tax
Income tax charge
(51,012)
(8,094)
Loss for the year
(59,106)
At 31 December 2008
Assets and liabilities
Intangible assets
Goodwill
Other unallocated assets
168,688
54,965
105,556
Total assets
329,209
Other unallocated liabilities
47,259
24,104
Total liabilities
71,363
Other segment information
Capital expenditure
Intangible fixed assets
4,618
–
Total capital expenditure
4,618
Depreciation
Amortisation
3,543
25,200
70,000
4 Results from operating activities
2009
2008
£000
£000
Profit/(loss) on ordinary activities before taxation is stated after charging
Depreciation
Research and development costs
4,436
25,200
–
–
3,543
25,200
70,000
915
Auditors’ remuneration:
Audit of these Financial Statements
Audit of subsidiaries’ Financial Statements
Review of interim Financial Statements
Services relating to direct and indirect taxation
Services relating to IT advisory
Services relating to a review of processes and controls
Other services
65
50
25
146
–
–
61
60
45
25
150
60
34
182
99
Business Overview
5 Staff numbers and cost
The average number of persons employed by the Group (including Directors) during the year, analysed by
category, was as follows:
IT operations
Administration
187
295
264
363
482
627
Business Review
Number of
Number of
employees
employees
2009
2008
The aggregate payroll costs of these persons were as follows:
Wages and salaries
Compulsory social security contributions
Contributions to defined contribution plans
Equity-settled share-based payment transactions
19,236
2,867
738
3,645
25,155
2,389
24
4,325
26,486
31,893
2009
2008
£000
£000
Financial income
Interest received on bank deposits
877
3,504
7 Income tax
Income tax charged in the Statement of Comprehensive Income
Current tax
Current tax on income for the year
Current tax on equity-settled share awards
9,202
–
13,936
(1,405)
12,531
(7,541)
(394)
(6,984)
2,547
(7,935)
(4,437)
Tax on profit/(loss) on ordinary activities
1,267
8,094
9,202
Deferred tax
Origination and reversal of temporary differences
Deferred tax on unapproved equity-settled share awards
2009
2008
£000
£000
6 Finance income
Management
2009
2008
£000
£000
General
61
7 Income tax continued
Reconciliation of the effective tax rate
The tax charge for the year is higher (2008: higher) than the standard rate of corporation tax in the UK in 2009 of
28% (2008: 28%). The differences are explained below.
2009
2008
£000
£000
3,183
(51,012)
Standard rate of tax at 28% (2008: 28.5%)
891
(14,538)
Effects of:
Expenses not deductible for tax purposes
Impairment charge against goodwill
Deferred tax not recognised at 28% (2008: 28.5%)
Impact on deferred tax of reduction in corporation tax rate to 28%
Movement on deferred tax related to share-based payments
Utilisation of losses on which no deferred tax asset previously recognised
1,182
–
513
–
(1,319)
–
1,720
19,950
338
125
1,143
(644)
Tax on profit/(loss) on ordinary activities (see above)
1,267
8,094
The standard rate of corporation tax in the UK reduced from 30% to 28% with effect from 1 April 2008. The
effective tax rate for 2008 was therefore estimated at 28.5%.
Unrecognised tax losses
The Group has tax losses arising from the results of a foreign subsidiary of £1,830,000 (2008: £1,185,000). A
deferred tax asset has not been recognised in respect of these losses as they may not be used to offset taxable
profits elsewhere in the Group and they have arisen in a foreign subsidiary that may not make a profit in the
immediate future.
8 Earnings per share
Basic earnings per share
Basic earnings per share amounts are calculated by dividing the profit or loss for the year attributable to ordinary
equity holders of the Company, by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share
Diluted earnings per share amounts are calculated by dividing the profit or loss for the year attributable to ordinary
equity holders of the Company, by the weighted average number of ordinary shares outstanding during the year
plus the weighted average number of ordinary shares that would be issued on the conversion of all dilutive potential
ordinary shares into ordinary shares.
Earnings per share
Basic and diluted earnings/(loss) per share has been calculated on the following basis:
2009
£000
Profit/(loss) after taxation attributable to ordinary equity holders
Basic weighted average ordinary shares in issue (millions)
Dilutive effect of share based instruments (millions)
Diluted weighted average ordinary shares in issue (millions)
Basic earnings/(loss) per ordinary share (pence)
2,068
506.2
9.5
515.7
0.4
(58,987)
498.9
–
498.9
(11.8)
Diluted earnings/(loss) per ordinary share (pence)
0.4
(11.8)
62
2008
£000
2008
£000
Declared and paid during the year:
Equity dividends on ordinary shares:
Final dividend for 2007: 1.63p per share
Interim dividend for 2008: 1.3p per share
Special dividend for 2009: 4.93p per share
–
–
11,110
6,598
25,022
8,098
6,539
–
–
–
Proposed for approval (not recognised as a liability at 31 December):
11,199
Special dividend for 2009: 4.91p per share 25,006
–
–
10 Property, plant and equipment
Land and Under
buildings construction
£000
£000
At 31 December 2008
6,330
Additions
Transfers
Disposals
Foreign exchange adjustments
5
–
–
–
At 31 December 2009
6,335
5,064
890
(5,064)
–
–
890
–
(886)
–
–
4
3,470
3,283
3,544
(131)
28
10,194
2,785
886
(119)
(13)
13,733
171
80
–
(9)
–
242
66
–
(5)
(3)
300
Fixtures
and fittings
£000
Total
£000
142
120
–
(18)
4
13,423
4,618
–
(169)
32
248
17,904
126
–
–
(3)
371
2,982
–
(124)
(19)
20,743
838
3,543
(91)
18
89
4,308
70
–
(1)
4,436
(124)
(12)
153
–
3,959
123
–
–
–
–
–
4,190
(119)
(11)
107
At 31 December 2009
276
–
8,019
155
158
8,608
Carrying amounts:
At 31 December 2007
4,528
5,064
2,739
148
106
12,585
At 31 December 2008
6,177
890
6,235
135
159
13,596
At 31 December 2009
6,059
4
5,714
145
213
12,135
53
(5)
–
63
General
At 31 December 2008
Depreciation for the year
Disposals
Depreciation:
At 1 January 2008
48
–
731
23
36
Depreciation for the year
114
–
3,281
89
59
Disposals
(9)
–
(71)
(5)
(6)
–
–
18
–
–
4,576
245
1,520
(11)
–
Office
equipment
£000
Cost:
At 1 January 2008
Additions
Transfers
Disposals
Plant and
equipment
£000
Management
2009
£000
Business Review
Business Overview
9 Dividends
11 Intangible assets
Market
related
£000
Customer
relationship
£000
Customer
list
£000
Technology
related
£000
Goodwill
£000
Total
£000
Cost:
At 1 January 2008, 31 December 2008
and 31 December 2009
132,100
68,500
713
5,900
124,965
332,178
Amortisation:
At 1 January 2008
Charged during the year
Impairment losses
6,985
13,210
–
5,174
9,786
–
126
238
–
1,040
1,966
–
–
–
70,000
13,325
25,200
70,000
At 31 December 2008
Charged during the year
20,195
13,210
14,960
9,786
364
238
3,006
1,966
70,000
–
108,525
25,200
At 31 December 2009
33,405
24,746
602
4,972
70,000
133,725
Carrying amounts:
At 31 December 2007
125,115
63,326
587
4,860 124,965
318,853
At 31 December 2008
111,905
53,540
349
2,894
54,965
223,653
At 31 December 2009
98,695
43,754
111
928
54,965
198,453
On an annual basis, or where an indication exists, the Group is required to assess its goodwill and intangible assets
for impairment.
During 2007 the Group employed the services of an appropriately qualified and experienced independent third
party to value the intangible assets acquired from Moneysupermarket.com Financial Group Limited. This valuation
was used as the initial carrying value for these assets. Following the impairment provision in 2008, the market
capitalisation of the Group approximated to the total carrying value of the goodwill, intangible and other noncurrent assets of the Group. At 31 December 2009 the market capitalisation exceeded the carrying value of the
goodwill, intangible and other non-current assets by 78%.
As disclosed in note 3, IFRS 8 has been adopted in the year with comparative disclosures made, and as a result
revised operating segments are disclosed. On adoption of IFRS 8 the Group was required to allocate goodwill
between its cash generating units (CGU) that represent the lowest level within the Group at which goodwill is
monitored for internal management purposes, but are not larger than an operating segment as defined by IFRS 8.
These CGUs are the four operating segments Insurance, Money, Travel and Home Services, and the Group has
therefore performed impairment testing at this level. The goodwill has been allocated on 1 January 2009 based on
estimates of the relative values of the operating segments at that date with £30.7m allocated to Insurance, £15.5m
to Money, £6.6m to Travel and £2.2m to Home Services.
For the current year, the recoverable amount of the assets was taken to be their value in use and was calculated by
reference to the forecast cash flows.
The present value of the future cash flows has been calculated with the following key assumptions:
• Cash flows for year 1 represent management’s best estimate of future cash flows as at 31 December 2009, and
are based upon the Group’s approved budget for 2010. The main assumptions underlying the 2010 budget relate
to visitor numbers and revenue per transaction/visitor. The forecast assumes some improvement during the
course of 2010 driven by the new branding campaign and investments made in the core technology for the
Group’s key channels, as well as the more settled outlook in the wider economy. The Insurance and Money
segments have been assumed to have similar rates of growth, and the Travel and Home Services segments have
been assumed to return to close to the revenue levels achieved in 2008.
• Cash flows for subsequent years for all segments are consistent with those in year 1 and assume no growth. No
reliable third party estimates of long term growth rates exist for the price comparison industry given it is a
relatively new business model.
• Cash flows into perpetuity have been incorporated into the calculations.
64
Business Overview
• A pre-tax discount rate of 15% has been used in the forecast for all segments. A lower discount rate has been
used compared with the rate used to test the Internet segment last year (16%) to reflect the reduction in the
uncertainty in the economic climate since the start of the year.
The analysis performed calculates that the recoverable amount of the assets allocated to the Insurance, Money and
Travel segments exceeds their carrying value by in excess of 100% and the recoverable amount of the assets
allocated to the Home Services segment exceeds their carrying value by 20%, and as such, are not impaired. No
reasonably possible change to a key assumption would result in an impairment.
Management
As explained in note 3, whilst the Group is able to allocate revenues between the four operating segments, its cost
base is reviewed by the Group’s Chief Operating Decision Maker at a Group rather than segmental level, and a
number of the significant costs which the Group incurs cannot be allocated either directly or on a reasonable and
consistent basis to the CGUs that are each operating segment. Therefore the cash flows estimated above include all
of the Group’s forecast revenues, but only approximately 55% of the Group’s cost base.
Business Review
When there are clear indications that the economy has begun to recover a different set of assumptions may be
more appropriate.
The Group has therefore also performed a further impairment test for the Group as a whole, in a manner consistent
with that in 2008. In these calculations the Group is treated as one group of CGUs, and the test compared the
carrying amount, including goodwill and other corporate assets, to the recoverable amount.
The analysis performed calculates that the recoverable amount of the Group’s assets exceeds their carrying value
by £44m, and as such, no impairment was identified.
At an individual level, management believe that the assumptions relating to each intangible asset remain applicable,
and that no adjustment is required to their valuation, nor their useful economic lives.
With regard to the Group level impairment testing, an increase of 3% in the discount rate, with all other assumptions
held constant, would give a value in use for the Group’s assets equal to their carrying value. Similarly, a decrease in
the annual cash flows of £6.0m, with all other assumptions held constant, would also give a value in use for the
Group’s assets equal to their carrying value.
The recoverable amount has been estimated based on the present value of its future cash flows which has been
calculated with a set of assumptions consistent with those set out above in relation to the individual operating
segment calculations.
General
65
12 Trade and other receivables
2009
2008
£000
£000
Trade receivables
14,375
16,074
All receivables fall due within one year.
As a result of click based revenue being recognised in the period that the lead is generated, a revenue accrual for
approximately one month’s revenue is recognised at the year end date.
At 31 December 2009, trade receivables are shown net of a provision for doubtful debts of £156,255 (2008:
£348,194), which represents a judgement made by management of which receivable balances are unlikely to be
recovered taking into consideration the aging of the debt, evidence of poor payment history or financial position of
a particular debtor.
Movements in the provision for doubtful debts were as follows:
2009
£000
At start of year
Charge for the year
Amounts written off
348
151
(343)
103
264
(19)
At 31 December
156
348
2008
£000
As at 31 December, the analysis of trade receivables that were past due but not impaired is as follows:
Neither past
Past due not impaired
due nor
impaired
0-30 days 30-60 days 60-90 days 90-120 days
£000
£000
£000
£000
£000
Total
£000
At 31 December 2008
16,074
10,409
3,466
1,529
242
330
98
At 31 December 2009
14,375
8,266
5,353
429
212
38
77
>120 days
£000
The Group’s standard payment terms are 15 days.
13 Trade and other payables
2009
2008
£000
£000
Trade payables due to related parties
Other trade payables
Non-trade payables and accrued expenses
Deferred income
–
13,126
5,620
10
5
12,471
8,217
17
18,756
20,710
As a result of click based revenue being recognised in the period that the lead is generated, an accrual for the cost
of sales relating to the revenue accrued at the year end date (see note 12) is included within other trade payables.
As at 31 December, the analysis of financial liabilities within trade payables, non-trade payables and accrued
expenses is as follows:
Total
£000
Current
£000
0-30 days
£000
30-60 days
£000
60-90 days
£000
90-120 days
£000
> 120 days
£000
At 31 December 2008
19,693
12,801
1,334
774
167
122
4,495
At 31 December 2009
18,746
13,665
798
472
408
151
3,252
As at 31 December 2009, the Group did not hold any other financial liabilities requiring disclosure under IAS 32.
66
Business Overview
14 Deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
I
Assets
Liabilities
2009
£000
2008
£000
At start of year
Temporary differences
Revaluation of LTIP equity-settled share awards
Revaluation of Chairman’s share award
Revaluation of unapproved share options at the balance sheet date
Issue of LTIP equity-settled share awards
Transfers
(362)
(484)
49
(29)
5
(370)
1,191
(3,124)
–
–
–
2,762
–
–
47,259
(7,057)
–
–
–
–
(1,191)
54,243
(6,984)
–
–
–
–
–
(362)
39,011
47,259
–
2008
£000
Business Review
At 31 December
2009
£000
Management
The deferred tax liability arises from the creation of the intangible assets upon the acquisition of
Moneysupermarket.com Financial Group Limited by the Company.
The deferred tax asset arises from the future deduction available upon the exercise of share options and
share awards.
15 Capital
Authorised
Thousands
Ordinary shares of 0.02p each
1,154,706
Deferred shares of 0.02p each
95,294
I
£
2008
Thousands
230,941 1,154,706
19,059
95,294 £
230,941
19,059
1,250,000 250,000 1,250,000 250,000
The following rights attached to the shares in issue during the year:
During the year the Company issued 2,676,662 (2008: 8,049,996) ordinary shares upon the exercising of
unapproved share options by a number of senior management.
Issued and fully paid
Number of shares
Ordinary
shares
Deferred
shares
At 31 December 2008
504,856,062
–
2,676,662
–
2,676,662
507,532,724
–
507,532,724
Issued on exercising of unapproved share options
592,100,184
(95,294,118)
8,049,996
504,856,062
496,806,066
–
8,049,996
At 31 December 2009
95,294,118
(95,294,118)
–
Total
At 1 January 2008
Purchase and cancellation of deferred shares
Ordinary shares
The owners of ordinary shares were entitled to returns of capital, receive a dividend and vote.
2009
Ordinary
Deferred
£
shares
shares
Total
At 31 December 2008
At 31 December 2009
99,361
–
1,610
19,059
(19,059)
–
118,420
(19,059)
1,610
100,971
–
100,971
535
–
535
101,506
–
101,506
67
General
At 1 January 2008
The Group has a number of share schemes under which options to subscribe for ordinary shares and conditional
awards of ordinary shares in the Company have been made to certain Directors and employees (see note 17).
16 Financial instruments
Interest rate risk
There is no significant exposure to interest risk as the Group has no borrowings.
The Group invests its cash in a range of cash deposit accounts with UK banks. Interest earned therefore closely
follows movements in Bank of England base rates. A movement of 1% in this rate would result in a difference in
annual pre-tax profit of £538,000 based on Group cash, cash equivalents and financial instruments at 31 December
2009. At the balance sheet date, £18,010,000 was invested with Lloyds Banking Group, this being the most
invested with any one bank.
Effective interest rates
In respect of interest-earning financial assets, the following table indicates their effective interest rates at the year
end date.
31 December 2009
Effective
interest rate
£000
0.69%
53,805
I
31 December 2008
Effective
interest rate
£000
2.84%
73,465
Credit risk
Credit risk with respect to trade receivables is monitored on an ongoing basis by the credit control team and
finance management. By value, over 90% (2008: 90%) of the Group’s revenue comes from blue chip companies.
Most of the remaining provider base is subject to payment terms of one week collected by direct debits. At the
balance sheet date, the five largest trade receivables, by provider, accounted for 12% (2008: 19%) of the total
trade receivables balance of £14,375,000 (2008: £16,074,000) and the largest individual balance was £585,211
(2008: £986,817).
Fair values
The Group’s financial assets and liabilities are principally short term in nature, and therefore their fair value is not
materially different from their carrying value.
17 Share-based payments
Unapproved share option scheme
Grant 1
On 22 May 2007 the holders of unapproved share options in Moneysupermarket.com Financial Group Limited
agreed to have their unapproved share options replaced with share options in the Company on similar terms to
those that operated under the original scheme. Options over 1,460 shares were originally exchanged. Following the
share sub-division on 9 July 2007 where each ordinary share was converted to 5,000 ordinary shares, the shares
under option were subject to a similar sub-division. Following this, there were therefore 7,300,000 share options in
issue that related to the share options in Moneysupermarket.com Financial Group Limited, exchanged for share
options in the Company.
These share options were originally granted by Moneysupermarket.com Financial Group Limited on 9 May 2005
and vested on the earlier of a trade sale or a flotation provided that in the event of a flotation the options had been
held for three years from the date of grant. The exercise price is 6p per share.
Grant 2
On 18 and 22 June 2007 the Company granted further unapproved share options that entitled key management
personnel and senior employees to acquire ordinary shares in the Company. Options were originally granted over
1,243 shares, which following the sub-division referred to above, became 6,215,000 shares. Options vest on the
earlier of a trade sale or, subject to a flotation, equally over a three year period on subsequent anniversaries from
the date of grant. The exercise price is 6p per share.
68
Long Term Incentive Plan scheme (LTIP)
On 28 December 2007 and 4 March 2008, the Company made conditional awards over 1,242,201 ordinary shares
under the Moneysupermarket.com Group PLC Long Term Incentive Plan scheme to senior employees (‘2008
LTIPs’). Under this scheme, shares vest at the end of a three year period dependent upon the achievement of a
cumulative adjusted EBITDA figure for the three financial years from 2008 to 2010. Based on the adjusted EBITDA
figures achieved in 2008 and 2009, management do not expect any of these awards to vest.
Subsequent to the year end, the Remuneration Committee has approved, in accordance with the rules of the
Chairman’s share award, the early subscription by Gerald Corbett of the shares comprising the Chairman’s share award.
During 2009, similar arrangements were entered into by Simon Nixon in favour of Paul Doughty and certain other
former employees, with options over a total of 3,378,683 ordinary shares held by Simon Nixon being granted
personally by him to those persons. Options over 2,793,911 ordinary shares vested on 31 July 2009 and 4 August
2009 and were exercised by the participants on 4 August 2009. Options over the remaining 584,772 ordinary
shares were dependent on the satisfaction of Group related performance targets for the year ended 31 December
2008 and lapsed.
69
General
Simon Nixon Scheme
During 2008, Simon Nixon established an additional incentive scheme under which he personally granted options
over 633,504 ordinary shares in the Company held by him in favour of one former employee of the Group. Options
over 487,311 ordinary shares vested on 8 October 2008 and were exercised by the former employee on that date.
Options over the remaining 146,193 ordinary shares were dependent on the satisfaction of Group related
performance targets for the year ended 31 December 2008 and lapsed.
Following the payment of the special dividend of 4.93p per ordinary share on 16 October 2009, the Remuneration
Committee approved, subsequent to the year end, an adjustment to the Chairman’s share award in accordance with
the rules of the scheme. As a result of that adjustment, Gerald Corbett has become entitled to subscribe at nominal
value for a total of 248,612 ordinary shares in the Company reflecting the reduction in the value of the Chairman’s
share award arising from the payment of that special dividend.
Chairman’s share award
Gerald Corbett, the Chairman of the Company, purchased 117,647 ordinary shares on the listing of the Company at
the initial offer price of £1.70. Subject to him retaining these shares for three years and provided that he completes
three years’ service as Chairman he shall be entitled to subscribe at nominal value for a total of 235,294 ordinary
shares in the Company.
During the year, conditional awards were made over 8,256,530 ordinary shares under the Moneysupermarket.com
Group PLC Long Term Incentive Plan scheme to senior employees (‘2009 LTIPs’). Under this scheme, up to 70% of
the shares vest at the end of a three year period dependent upon the achievement of an adjusted EBITDA figure for
each of the three financial years from 2009 to 2011, and up to 30% of the shares vest at the end of a three year
period dependent upon the Total Shareholder Return (TSR) of the Company relative to a comparator group of
defined companies.
Management
Share Incentive Plan scheme (SIP)
Upon listing, the Company granted £3,000 of ordinary shares at the price of £1.70 per ordinary share to each eligible
employee free of charge. If an employee leaves within one year of listing, all of these ordinary shares are forfeit;
between one and two years of listing, 50% are forfeit; between two and three years of listing, 20% are forfeit; and after
three years of listing, none are forfeit. 948,184 shares were issued under the Share Incentive Plan scheme in 2007.
Business Review
Subsequent to the year end, the Remuneration Committee has approved the early vesting of all remaining
unapproved share options under the unapproved share option scheme.
Business Overview
17 Share-based payments continued
Grant 3
Post the sub-division of shares referred to above, on 10 and 21 July 2007 the Company granted further unapproved
share options that entitled key management personnel and senior employees to acquire shares in the Company.
Options were originally granted over 105,000 shares. Options vest on the earlier of a trade sale or, subject to a
flotation, equally over a three year period on subsequent anniversaries from the date of grant. The exercise price is
6p per share.
17 Share-based payments continued
Movements in the year
The following table illustrates the number and weighted average exercise price (WAEP) of, and movements in,
share options and share awards during the year:
Number
Outstanding at 1 January 200815,000,509
LTIP awards made during the year
36,643
LTIP awards forfeit during the year (254,872)
Unapproved options exercised during the year (with a WAEP of £0.06)(8,049,996)
Unapproved options forfeit during the year (1,198,334)
Simon Nixon Scheme options granted during the year 633,504
Simon Nixon Scheme options exercised during the year (with a WAEP of £0.00) (487,311)
Simon Nixon Scheme options lapsed during the year (146,193)
WAEP
£0.05
£0.00
£0.00
£0.06
£0.06
£0.00
£0.00
£0.00
Outstanding at 31 December 2008 5,533,950
£0.04
LTIP awards made during the year 8,256,530
LTIP awards forfeit during the year (1,225,811)
Unapproved options exercised during the year (with a WAEP of £0.06)(2,676,662)
Unapproved options forfeit during the year (113,337)
Simon Nixon Scheme options granted during the year 3,378,683
Simon Nixon Scheme options exercised during the year (with a WAEP of £0.00) (2,793,911)
Simon Nixon Scheme options lapsed during the year (584,772)
£0.00
£0.00
£0.06
£0.06
£0.00
£0.00
£0.00
Outstanding at 31 December 20099,774,670
£0.01
As at 31 December 2009, 10,000 unapproved share options had vested but not been exercised.
The following table lists the inputs to the Black-Scholes models used for the schemes for the year ended
31 December 2009:
Unapproved
SIP/
Chairman’s
Award
2009
LTIP
Fair value at grant date (£)
Share price (£)
Exercise price (£)
Expected volatility (%)
Expected life of option/award (years)
Weighted average remaining contractual life (years)
Expected dividend yield (%)
Risk-free interest rate (%)
1.55-1.65
1.70
0.00
n/a
3.0
0.6
3.0
4.5
0.53
0.53
0.00
n/a
3.0
2.3
0.0
4.5
1.57
1.70
0.06
30.0
3.0
0.7
3.0
4.5
2008 Simon Nixon
LTIP
Scheme
1.26-1.34
1.38
0.00
n/a
3.0
1.0
0.0
4.5
0.56
0.56
0.00
n/a
0.0
n/a
6.3
4.2
Expected volatility has been estimated by considering historic average share price volatility for similar companies.
Staff attrition has been assessed based on historic retention rates.
The share option charge in the Statement of Comprehensive Income can be attributed to the following types of
share option and share award:
2009
£000
2008
£000
Unapproved share option scheme
Share Incentive Plan (SIP) scheme
Chairman’s share award
Long Term Incentive Plan (LTIP) scheme
Simon Nixon scheme
1,478
415
165
286
1,301
3,520
249
121
162
273
3,645
4,325
70
Management
20 Related party transactions
The Group has the following investments in subsidiaries:
Business Review
19 Commitments and contingencies
The Group is a defendant in a small number of disputes incidental to its operations which, in aggregate, are not
expected to have a material adverse effect on the Group. Provision has been made for the expected settlement
where the Group believes a payment will be made to settle the dispute.
Business Overview
18 Pensions and other post-employment benefit plans
The Group operates a defined contribution pension scheme based on basic salary. The assets of the scheme are
held separately from those of the Group in an independently administered fund. The amounts charged to the
Statement of Comprehensive Income represent the contributions payable to the scheme in respect of the
accounting period. In the year ended 31 December 2009 £738,143 of contributions were charged to the
Statement of Comprehensive Income (2008: £24,000). As at 31 December 2009 £70,458 (2008: £2,000) of
contributions were outstanding on the balance sheet.
Country of incorporation Ownership interest
100
Holding company
100
Internet price comparison
100
Dormant
100
Dormant
100 Financial intermediary services
100
Holding company
100
Dormant
100
Internet price comparison
100
Dormant
The Company is the ultimate parent entity of the Group. Intercompany transactions with wholly owned subsidiaries
have been excluded from this note, as per the exemption offered in IAS 24.
In addition to their salaries, the Group also provides non-cash benefits to Directors and executive officers. Directors
and executive officers also participate in the Group’s unapproved share option and Long Term Incentive Plan
schemes, see note 17.
Key management personnel compensation
Key management, defined as the executive management team, received the following compensation during the year:
2009
2008
£000
£000
1,787
1,984
102
2,274
2,820
9
3,873
5,103
Other related party transactions
A number of Directors and key management personnel hold positions in other entities that result in them having
control or significant influence over the financial or operating policies of these entities.
71
General
Short term employee benefits
Share-based payments
Post employment benefits
Gerald Corbett, Michael Wemms, Simon Nixon and Paul Doughty received dividends from the Group totalling £7,897,281
in 2008 and £22,760,906 in 2009.
Transactions with key management personnel
There were no outstanding amounts loaned to Directors by the Company at 31 December 2009.
Moneysupermarket.com Financial Group Limited
UK
Moneysupermarket.com Limited
UK
Travelsupermarket.com Limited
UK
Insuresupermarket.com Limited
UK
Mortgage 2000 Limited
UK
Making Millionaires Limited
UK
Moneysupermarket Limited
UK
icero GmbH
Germany
Betcompare.com Limited (formerly Inhoco 3429 Limited)
UK
Principal activity
20 Related party transactions continued
A number of these entities transacted with the Group in the reporting period.
The aggregate value of transactions and outstanding balances relating to key management personnel and entities
over which they have control or significant influence were as follows:
Transaction Transaction
Balance Balance
value value outstanding outstanding
Year ended Year ended as at as at
31 December 31 December 31 December 31 December
2009
2008
2009
2008
Director
Company
£000
£000
£000
£000
S J NixonAbacus Permanent Limited
S J NixonVirtual Processing Limited
(221)
216
53
238
–
–
(221)
216
The Group provided office space and services to Abacus Permanent Limited and Virtual Processing Limited during
the year, companies in which Simon Nixon controls over 90% of the voting shares. The Group recharged these two
companies rent and associated services at the same levels as it recharged wholly owned subsidiary companies.
These rates were based on notional open market rents for similar offices in the locality. In addition the Group
provided payroll services for these related companies, fully recovering salaries paid. In the normal course of trade
with these related companies the Group both charged and was charged for mortgage procuration fees. The level of
these fees were at arm’s length and mirrored the going rates in the open market.
On 2 July 2009, Rob Budden, a director of Foom.com Limited, acquired 160 ordinary shares of £1 each in the
capital of Foom.com Limited from Making Millionaires Limited, representing all of the shares in Foom.com Limited
owned by the Group in consideration for the future payment by Rob Budden of 5% of aggregate revenues of Foom.
com Limited for each of the first five financial years that such aggregate revenues of Foom.com Limited are equal
to or greater than £10,000.
On 18 September 2009, Moneysupermarket.com Financial Group Limited acquired from Tim Heidfeld, formerly a
director of icero GmbH, all of the shares in icero GmbH owned by him in consideration for the payment by
Moneysupermarket.com Financial Group Limited to Tim Heidfeld of €2,500.
21 Post balance sheet events
There have been no significant post balance sheet events requiring disclosure.
72
Company Balance Sheet
2009
2008
Note
£000
£000
Fixed assets
Investments
181,688
181,688
Current assets
Debtors
5
Cash at bank and in hand
55,738
597
20,820
27,994
Total current assets
56,335
48,814
Creditors: amounts due within one year
6
(168)
Business Review
4
Business Overview
at 31 December 2009
(15,168)
56,167
33,646
Net assets
237,855
215,334
Capital and reserves
Share capital
Share premium
Other reserves
Profit and loss
8
8
8
8
102
171,207
16,942
49,604
101
171,047
16,942
27,244
237,855
215,334
The Financial Statements were approved by the Board of Directors and authorised for issue on 23 February 2010.
They were signed on its behalf by:
Management
Net current assets
Peter Plumb
Paul Doughty
General
73
Notes to the Company Financial Statements
1 Accounting policies
The Financial Statements are prepared under the historical cost convention and in accordance with applicable
United Kingdom accounting standards.
No profit and loss account is presented for the Company as permitted by section 408 of the Companies Act 2006.
The profit after tax for the Company was £61,445,000.
The Company has taken the exemption in FRS 1 5(a) and consequently no cash flow statement is presented for
the Company.
Investments
Investments are shown at cost less provision for impairment.
Share-based payment transactions
The Group’s share schemes allow certain Group employees to acquire ordinary shares in the Company. The fair
value of share awards made is recognised as an employee expense with a corresponding increase in equity. The fair
value is measured at award date and spread over the period during which the employees become unconditionally
entitled to the awards. The fair value of the awards made is measured using an option valuation model, taking into
account the terms and conditions upon which the awards were made. The amount recognised as an expense is
adjusted to reflect the number of share awards expected to vest. Subsidiaries are recharged for the amount
recognised as share based payments relating to awards to their employees. The fair value of the recharge is
recognised over the vesting period.
Dividends
Dividends receivable are recognised when the Company’s right to receive payment is established. Dividends
payable to the Company’s shareholders are recognised as a liability and deducted from shareholders’ equity in the
period in which the shareholders’ right to receive payment is established.
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the profit and loss
account except to the extent that it relates to items recognised directly in equity, in which case it is recognised
in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised, without discounting, in respect of all timing differences between the treatment of
certain items for taxation and accounting purposes which have arisen but not reversed by the balance sheet date,
except as otherwise required by FRS 19.
2 Share-based payments
The analysis and disclosures in relation to share-based payments are given in the Consolidated Financial Statements
in note 17.
74
Business Overview
3 Staff numbers and cost
The average number of persons employed by the Company (including Directors) during the year, analysed by
category, was as follows:
Number of
Number of
employees
employees
2009
2008
Administration
5
2
The aggregate payroll costs of these persons were as follows:
2009
2008
£000
£000
1,166
601
70
1,903
787
99
–
1,947
3,740
2,833
Management
Wages and salaries
Social security costs
Other pension costs
Share based payments
Business Review
4 Investments
Shares in subsidiary undertakings
£000
181,688
The investment comprises £162,000,000 of cash consideration, £2,765,000 of costs and £16,923,000 arising from
the transfer of net assets at book value from a company under common control, representing the acquisition of
Moneysupermarket.com Financial Group Limited by the Company.
5 Debtors
Amount due from subsidiary undertakings
Other debtors
Corporation tax
55,211
9
518
20,812
8
–
55,738
20,820
6 Creditors: amounts falling due within one year
Amount owed to subsidiary undertaking
Accruals
–
168
15,040
128
168
15,168
2009
2008
£000
£000
2009
2008
£000
£000
Cost and net book value:
At 31 December 2008 and 31 December 2009
General
75
Notes to the Company Financial Statements continued
7 Dividends
2009
2008
£000
£000
Declared and paid during the year:
–
–
11,110
6,598
25,022
8,098
6,539
–
–
–
Proposed for approval (not recognised as a liability at 31 December):
11,199
25,006
–
–
During 2009, the Company received dividends of £63,000,000 from Moneysupermarket.com Financial
Group Limited.
8 Capital and reserves
Authorised
2009
Thousands
Ordinary shares of 0.02p each 1,154,706
Deferred shares of 0.02p each
95,294
£
I
2008
Thousands
230,941 1,154,706
19,059
95,294 £
230,941
19,059
1,250,000 250,000 1,250,000 250,000
The following rights attached to the shares in issue during the year:
Ordinary shares
The owners of ordinary shares were entitled to returns of capital, receive a dividend and vote.
During the year the Company issued 2,676,662 (2008: 8,049,996) ordinary shares upon the exercising of
unapproved share options by a number of senior management.
Issued and fully paid
Number of shares
Ordinary
shares
At 1 January 2008
496,806,066
–
8,049,996
At 31 December 2008
504,856,062
At 31 December 2009
76
2,676,662
507,532,724
Deferred
shares
95,294,118
(95,294,118)
–
Total
592,100,184
(95,294,118)
8,049,996
–
504,856,062
–
2,676,662
– 507,532,724
Business Overview
8 Capital and reserves continued
£
Ordinary
shares
Deferred
shares
At 1 January 2008
99,361
–
1,610
19,059
(19,059)
–
At 31 December 2008
100,971
–
100,971
535
–
535
101,506
–
101,506
At 31 December 2009
118,420
(19,059)
1,610
Other reserves
Other
reserves
£000
Profit and
loss
£000
At 1 January 2008170,565
Shares issued 482
Total recognised profit in year
–
Equity dividends
–
–
Share based payment
–
16,923
–
–
–
19
–
35,366
–
2,190
(14,637)
–
4,325
At 31 December 2008171,047
16,942
27,244
Shares issued
Total recognised profit in year
Equity dividends
Share based payment
–
–
–
–
At 31 December 2009171,207
16,942
–
61,445
(42,730)
3,645
49,604
Other reserves represents the merger reserve for £16,923,000 generated upon the acquisition of
Moneysupermarket.com Financial Group Limited by the Company, as discussed in the Consolidated Statement of
Changes in Equity, and a capital redemption reserve for £19,000 arising from the acquisition of 95,294,118 deferred
shares of 0.02p by the Company from Simon Nixon.
9 Related party transactions
The Company has taken the exemption in FRS 8.3 not to disclose transactions with other Group companies.
160
–
–
–
Share
premium
£000
Management
The Group has a number of share schemes under which options to subscribe for ordinary shares and conditional
awards of ordinary shares in the Company have been made to certain Directors and employees of the Group (see
note 17 of the Consolidated Financial Statements).
Business Review
Total
General
77
General
Shareholder Information
Registered office and registered number
Moneysupermarket House
St David’s Park
Ewloe
Chester CH5 3UZ
No. 6160943
Telephone: +44 (0)1244 665700
Website: www.moneysupermarket.com
Company Secretary
Darren Drabble
Financial advisors/stockbrokers
Credit Suisse Securities (Europe) Limited
One Cabot Square
London E14 4QJ
UBS Limited
1 Finsbury Avenue
London EC2M 2PP
Auditors
KPMG Audit Plc
St James’ Square
Manchester M2 6DS
78
Solicitors
Herbert Smith
Exchange House
Primrose Street
London EC2A 2HS
Principal bankers
Lloyds TSB Bank plc
City Office
PO Box 1000, BX1 1LT
Financial PR
Tulchan Communications
Sixth Floor
Kildare House
3 Dorset Rise
London EC4Y 8EN
Registrar
Capita Registrars
Northern House
Woodsome Park
Fenay Bridge
Huddersfield HD8 0GA
Telephone:
0871 664 0300 (UK)
(Calls cost 10p per minute plus network
extras. Lines are open 8.30am-5.30pm
Monday-Friday)
+44 (0)208 639 3399 (overseas)
E-mail: moneysupermarket@capitaregistrars.com
Business Overview
Business Review
Enquiring about your shareholding
If you want to ask, or need any information, about your shareholding, please contact our registrar (see contact
details above). Alternatively, if you have internet access, you can access the Group’s shareholder portal at
www.moneysupermarket-shares.com where you can, amongst other things, view details of your shareholding,
set up or amend a dividend mandate and update your address details.
Investor relations website
The investor relations section of our website, www.moneysupermarket.com, provides further information
for anyone interested in the Group. In addition to the Annual Report and Accounts and share price, Company
announcements including the half year and full year results announcements and associated presentations
are also published there.
Management
Dividend mandates
If you wish to have dividends paid directly into a bank or building society account, you should contact our
registrar (see contact details on the left) for a dividend mandate form or visit the Group’s shareholder portal
at www.moneysupermarket-shares.com where you can set up or amend a dividend mandate. This method of
payment removes the risk of delay or loss of dividend cheques in the post and ensures that your account is
credited on the due date.
Dividend reinvestment plan (DRIP)
You can choose to reinvest dividends received to purchase further shares in the Company through a DRIP.
A DRIP application form is available from our registrar (see contact details on the left).
Share dealing service
You can buy or sell the Company’s shares in a simple and convenient way via the Capita share dealing service
either online (www.capitadeal.com) or by telephone (0871 664 0445). Calls cost 10p per minute plus network
extras. Lines are open 8.00am-4.30pm Monday-Friday.
Please note that the Directors of the Company are not seeking to encourage shareholders to either buy or sell
shares in the Company. Shareholders in any doubt about what action to take are recommended to seek financial
advice from an independent financial advisor authorised by the Financial Services and Markets Act 2000.
Electronic communications
You can elect to receive shareholder communications electronically by writing to our registrar, Capita Registrars,
Freepost RLYX-GZTU-KRRG, SAS, The Registry, 34 Beckenham Road, Beckenham, BR3 9ZA. This will save on
printing and distribution costs, creating environmental benefits. When you register, you will be sent a notification
to say when shareholder communications are available on our website and you will be provided with a link to
that information.
Cautionary note regarding forward looking statements
This Annual Report includes statements that are forward looking in nature. Forward looking statements involve
known and unknown risks, assumptions, uncertainties and other factors which may cause the actual results,
performance or achievements of the Group to be materially different from any future results, performance or
achievements expressed or implied by such forward looking statements. Except as required by the Listing Rules,
Disclosure and Transparency Rules and applicable law, the Company undertakes no obligation to update, revise
or change any forward looking statements to reflect events or developments occurring after the date of this
Annual Report.
General
79
General
Financial Calendar
Declaration date of 2009 final dividend
Announcement of 2009 full year results
Ex-dividend date of 2009 final dividend
Record date of 2009 final dividend
Annual General Meeting
Payment date of 2009 final dividend
Interim management statement Half year end Announcement of 2010 half year results
Interim management statement
Full year end Announcement of 2010 full year results 24 February 2010
24 February 2010
3 March 2010
5 March 2010
31 March 2010
1 April 2010
*April 2010
30 June 2010
*August 2010
*November 2010
31 December 2010
*February 2011
* Exact dates to be confirmed
Further copies of this Annual Report are available from the Company’s registered office, or may be accessed
through the Group’s website, www.moneysupermarket.com.
80
Shareholder Notes
Business Overview
Business Review
Management
General
81
Shareholder Notes
82
How do we operate?
economic times.
performance?
4
3
2008
2008
2009
Travel products
compared include:
•Loans
•Credit cards
•Current accounts
•Savings accounts
•Motor
•Home
•Travel
•Breakdown
•Flights
•Hotels
•Package holidays
•Car hire
•Utilities
KPIs:
KPIs:
KPIs:
KPIs:
Visitors (000)
24,143 -3%
Visitors
Visitors
Visitors(000)
(000)
(000)
35,178
35,178
35,178 0%
0%
0%
2009
2009
2009
2009
35,178
2009
35,178
35,178
35,178
2009
2009
2009
24,143
24,143
24,143
24,1432009
2008
35,131
2008
2008
2008
2008
35,131
35,131
35,131
2008
2008
2008
24,830
2008
24,830
24,830
24,830
2008
0
68.3
1. Money 38.1
2. Insurance 77.7
2. Insurance 75.7
3. Travel
19.1
3. Travel
16.3
4. Home Services
7.4
4. Home Services
5.5
0
24830
35178
35178
35178
Transactions
Transactions
Transactions
(000)
(000)
(000)
13,189 -14%
13,189
13,189
13,189 -14%
-14%
-14%
11,650
11,650
11,650 2009
2008
2008
2008
15,003
15,003
15,003
15,003
2008
15003
15003
15003
15003
0
13,189
2009
2009
2009
2008
1.94
1.94
1.94
2008
2008
2008
1.94
0.00
0.00
0.00
1.94
0.00
1.94
1.94
1.94
13,189
13,189
13,189
2009
15,385
15,385
15,385
2008
15385
15385
15385
0
3.14
2009
2009
2009
18,216
2008
2008
2008
11,245
11,245
11,245
0
18216
48924
48924
48924
Transactions
Transactions
Transactions
(000)
(000)
(000)
5,177 +79%
5,177
5,177
5,177+79%
+79%
+79%
2009
2008
38,149
38,149
38,149
38149
11,245
18,216
18,216
18,216
0
28,904
28,904
28,904
2008
2008
2008
38,149
00 0
2009
0
38149
38149
38149
2009
2009
2009
5,177
2,891
5,177
5,177
5,177
2008
2008
2008
00 0
18216
18216
18216
2,891
2,891
2,891
5177
5177
5177
5177
Revenue
Revenue
Revenueper
per
pervisitor
visitor
visitor(£)
(£)
(£)
Revenue
Revenue
Revenueper
per
pervisitor
visitor
visitor(£)
(£)
(£)
0.30
0.30
0.30
0.30
0.38
0.38
0.38
0.38
2009 0.30
2009
2009
2009 0.30
0.30
0.30
3.13
3.13
3.13
0.38
0.38
0.38
0.38
2009
2009
2009
2009
2008
3.13
3.13
3.13
2008
2008
20083.13
28,904
2009
2009
2009
•Shopping
Visitors
Visitors
Visitors(000)
(000)
(000)
18,216
18,216
18,216+62%
+62%
+62%
2008
48,924
48,924
48,924
2008
2008
2008
48,924
•Vouchers
Visitors (000)
18,216 +62%
42,970
42,970
42,970
24830
24830
24830
0
48924
Transactions
Transactions
Transactions
(000)
(000)
(000)
28,904 -24%
28,904
28,904
28,904 -24%
-24%
-24%
15385
0.00
0.00
0.00
2009
2009
2009
42,970
0
2008
2008
2008
15,385
00 0
Visitors
Visitors
Visitors(000)
(000)
(000)
42,970
42,970
42,970-12%
-12%
-12%
•Mobiles
3.14
3.14
0.00 3.14
2008
0.39
0.39
0.39
2008
2008
2008
0.39
0.00
0.00
0.00
0.39
0.00
0.39
0.39
0.39
2008
2008
2008
0.66
0.00
0.00
0.00
0.66
0.66
0.66
0.66
Revenue
per transaction
Revenue
Revenue
Revenue
(£) per
per
pertransaction
transaction
transaction(£)
(£)
Revenue
Revenue
Revenue
(£) per
per
pertransaction
transaction
transaction(£)
(£)
(£)
Revenue
Revenue
Revenue
(£) per
per
pertransaction
transaction
transaction(£)
(£)
Revenue
Revenue
Revenue
(£) per
per
pertransaction
transaction
transaction(£)
(£)
(£)
5.20
5.20
5.20
5.20
1.03
1.03
1.03
1.03
0.51
0.51
0.51
0.51
2.82
2.82
2.82
2.82
2009
2009
2009
5.20
5.20
5.20
5.20
2009 1.03
2009
2009
2009 1.03
1.03
1.03
2009
2009
2009
2009
0.51
0.51
0.51
0.51
2009
2.822009
2009
2009
2.82
2.82
2.82 2009
2008
0.00
0
Revenue
Revenue
Revenueper
per
pervisitor
visitor
visitor(£)
(£)
(£)
Revenue
Revenue
Revenueper
per
pervisitor
visitor
visitor(£)
(£)
3.13
3.13
3.13
3.13
1.08
1.08
1.08
1.08
2009
2009
2009
2009
3.13
2009
1.08
2009
2009
2009
1.08
1.08
1.08
0.00
1. Money 11,650
2009
2009
2009
00 0
2008
2
Visitors (000)
42,970 -12%
Visitors
Visitors
Visitors(000)
(000)
(000)
24,143
24,143
24,143-3%
-3%
-3%
Visitors (000)
35,178 0%
2009
2009
Home services
products compared
include:
Insurance products
compared include:
1
1
HOME
SERVICES
TRAVEL
Money products
compared include:
0
35178
Transactions
Transactions
(000)
(000)
(000)
11,650 -22%
11,650
11,650
11,650 -22%
-22%
-22%
2
1
INSURANCE
0
4
3
MONEY
2008
3.82
3.82
3.82
2008
2008
2008
3.82
0.00
0.00
0.00
3.82
0.0
3.82
3.82
3.82
4.33
2008
2008
2008
0.0
0.00.0
2
4.33
4.33
4.33
5.2
2008
0.00
5.2
5.25.2
0.44
0.44
0.44 2008
2008
2008
0.44
2008
0.00
0.00
0.00
0.51
0.00
0.51
0.51
0.51
2008
2008
2008
2.52
0.00
0.00
0.00
0.66
0.66
0.66
2.52
2.52
2.52
2.52
2.52
2.52
2.52
Annual Report 2009
and service.
Helping every
household
to make the
most of their
money
Contents
Business Overview
1 At a Glance
3 Highlights
4 Our Strategy
Report
Business Review
8
9
10
14
22
Principal Risks and
Uncertainties
Management
Company Secretary
General

Moneys Our ob every h the mo

Transcription

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